ACTIVE ASSETS PREMIER MONEY TRUST, 497, 2000-08-31

ACTIVE ASSETS PREMIER MONEY TRUST
497, 2000-08-31

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<PAGE>

PROSPECTUS -AUGUST 29, 2000

ACTIVE ASSETS
INSTITUTIONAL MONEY TRUST
PREMIER MONEY TRUST

TWO SEPARATE MONEY MARKET FUNDS
OFFERED EXCLUSIVELY TO PARTICIPANTS IN THE ACTIVE
ASSETS-Registered Trademark- OR BUSINESSCAPE-SM- FINANCIAL SERVICE PROGRAMS

FOR INFORMATION ON THE ACTIVE ASSETS OR
BUSINESSCAPE FINANCIAL SERVICE PROGRAMS, READ
THE CLIENT ACCOUNT AGREEMENT FOR EACH PROGRAM AND/OR
CALL (800) 869-3326 OR (212) 392-5000 (FOR THE ACTIVE ASSETS
PROGRAM) OR (800) 355-3086 (FOR THE BUSINESSCAPE PROGRAM).

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this PROSPECTUS. Any representation to
the contrary is a criminal offense.
<PAGE>
CONTENTS

<TABLE>
<S> <C> <C>
Eligible Investors/Overview ............................. 1

The Funds
Active Assets Institutional Money
Trust Investment Objectives... .... 2
Principal Investment
Strategies................... 2
Principal Risks.............. 2
Fees and Expenses............ 3
Active Assets Premier
Money Trust Investment Objectives... .... 5
Principal Investment
Strategies................... 5
Principal Risks.............. 5
Fees and Expenses............ 6

Fund Management................................................. 8

Shareholder Information Pricing Fund Shares.......... 9
How Are Fund Investments
Made?........................ 9
How Are Fund Shares Sold?.... 10
Distributions................ 12
Tax Consequences............. 12

Financial Information........................................... 14

THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION
ABOUT THE FUNDS. PLEASE READ IT CAREFULLY AND
KEEP IT FOR FUTURE REFERENCE.
</TABLE>

<PAGE>
ELIGIBLE INVESTORS/OVERVIEW

Active Assets Institutional Money Trust and Active Assets Premier
Money Trust (each, a "Fund") are two separate money market funds
offered exclusively to participants in the Active
Assets-Registered Trademark- or BusinesScape-SM- financial service
programs offered by Dean Witter Reynolds Inc. (the "Financial Service
Programs"). (Dean Witter Reynolds Inc. is affiliated with Morgan
Stanley Dean Witter Advisors Inc., the Funds' Investment Manager.)

Participants in the Financial Service Programs are offered a Dean
Witter brokerage account that is linked to the Funds, as well as to
Active Assets Money Trust, Active Assets Tax-Free Trust, Active
Assets California Tax-Free Trust and Active Assets Government
Securities Trust (four other money market funds participating in the
Financial Service Programs), a debit card, a checking account and, in
the case of the Active Assets program, a federally insured bank
account. In addition, participants in the BusinesScape program may
have access to a commercial line of credit.

The annual fee presently charged for participating in the Active
Assets program ($80 for individuals and $100 for businesses) or the
BusinesScape program ($150) is currently waived for investors in the
Funds. At any time, Dean Witter Reynolds Inc. may change the annual
fee charged and the services provided under the Financial Service
Programs. For details on the Financial Service Programs, please read
the client account agreement for each program.

The minimum investment amount for Active Assets Institutional Money
Trust is $10,000,000.

The minimum investment amount for Active Assets Premier Money Trust
is $5,000,000.

1
<PAGE>
[Sidebar]
MONEY MARKET
A MUTUAL FUND HAVING THE GOAL TO SELECT SECURITIES TO PROVIDE CURRENT INCOME
WHILE SEEKING TO MAINTAIN A STABLE SHARE PRICE OF $1.00.
YIELD
THE FUND'S YIELD REFLECTS THE ACTUAL INCOME THE FUND PAYS TO YOU EXPRESSED AS A
PERCENTAGE OF THE FUND'S SHARE PRICE. BECAUSE THE FUND'S INCOME FROM ITS
PORTFOLIO SECURITIES WILL FLUCTUATE, THE INCOME IT IN TURN DISTRIBUTES TO YOU
AND THE FUND'S YIELD WILL VARY.
[End Sidebar]

THE FUNDS

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

[ICON] INVESTMENT OBJECTIVES
--------------------------------------------------------------------------------
The Fund is a money market fund that seeks high current income,
preservation of capital and liquidity.

[ICON] PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------
The Fund invests in high quality, short-term debt obligations. In
selecting investments, the Fund's "Investment Manager," Morgan
Stanley Dean Witter Advisors Inc., seeks to maintain the Fund's share
price at $1.00. The share price remaining stable at $1.00 means that
the Fund would preserve the principal value of your investment.

The Fund's investments include the following money
market securities:

<TABLE>
<S> <C>
- Commercial paper;

- Corporate obligations;

- Debt obligations of U.S.-regulated banks and instruments
secured by those obligations (including certificates of
deposit);

- Certificates of deposit of savings banks and savings and
loan associations;

- Debt obligations issued or guaranteed as to principal and
interest by the U.S. government, its agencies or
instrumentalities;

- Repurchase agreements (which may be viewed as a type of
secured lending by the Fund); and

- Foreign bank obligations.
</TABLE>

[ICON] PRINCIPAL RISKS
--------------------------------------------------------------------------------

There is no assurance that the Fund will achieve its investment
objectives.

Shares of the Fund are not bank deposits and are not insured or
guaranteed by the FDIC or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per
share, if it is unable to do so, it is possible to lose money by
investing in the Fund.

2
<PAGE>
[Sidebar]
ANNUAL FUND
OPERATING EXPENSES
THESE EXPENSES ARE DEDUCTED FROM THE FUND'S ASSETS AND ARE BASED ON EXPENSES
PAID FOR THE FISCAL PERIOD ENDED JUNE 30, 2000.
[End Sidebar]
CREDIT AND INTEREST RATE RISKS. Principal risks of investing in the
Fund are associated with its debt obligation investments. All debt
obligations, such as bonds, are subject to two types of risk: credit
risk and interest rate risk. Credit risk refers to the possibility
that the issuer of a security will be unable to make interest
payments and/or repay the principal on its debt. Interest rate risk
refers to fluctuations in the value of a debt security resulting from
changes in the general level of interest rates.

The Investment Manager actively manages the Fund's assets to reduce
the risk of losing any principal investment as a result of credit or
interest rate risks. The Fund's assets are reviewed to maintain or
improve creditworthiness. In addition, federal regulations require
money market funds to invest only in debt obligations of high quality
and short-term maturities.

FOREIGN MONEY MARKET SECURITIES. The Fund may invest in U.S. dollar
denominated money market instruments and other short-term debt
obligations issued by foreign banks. Although the Fund will invest in
these securities only if the Investment Manager determines they are
of comparable quality to the Fund's U.S. investments, investing in
securities of foreign issuers involves some additional risks. These
risks may include higher costs of foreign investing, and the
possibility of adverse political, economic or other developments
affecting the issuers of these securities.

[ICON] FEES AND EXPENSES
--------------------------------------------------------------------------------
The table below briefly describes the fees and expenses that you may
pay if you buy and hold shares of the Fund. The Fund is a no-load
fund. The Fund does not impose any sales charges or distribution and
service (12b-1) fees.

<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
--------------------------------------------------------------------
Management Fee 0.04%
--------------------------------------------------------------------
Distribution and service (12b-1) fees 0.00%
--------------------------------------------------------------------
Other expenses 0.16%
--------------------------------------------------------------------
Total annual Fund operating expenses(1) 0.20%
--------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C>
(1) The fees and expenses disclosed above reflect that the
Investment Manager has agreed under its Investment
Management Agreement with the Fund to assume the Fund's
operating expenses (except for brokerage fees) to the extent
such operating expenses exceed on an annualized basis 0.20%
of the average daily net assets of the Fund. If the Fund had
borne all of its expenses that were assumed or waived by the
Investment Manager, the annualized expense ratios would have
been as follows: (i) management fee: 0.15%;
(ii) distribution and service (12b-1) fee: 0.00%;
(iii) other expenses: 0.16%; and (iv) total annual Fund
operating expenses: 0.31%.
</TABLE>

3
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund, your
investment has a 5% return each year, and the Fund's operating
expenses remain the same. Although your actual costs may be higher or
lower, the table below shows your costs at the end of each period
based on these assumptions.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C>
-------------------------
$20 $64
-------------------------
</TABLE>

The Fund commenced operations on February 15, 2000 and as of the date
of this PROSPECTUS did not have a full calendar year of performance
to report.

4
<PAGE>
[Sidebar]
MONEY MARKET
A MUTUAL FUND HAVING THE GOAL TO SELECT SECURITIES TO PROVIDE CURRENT INCOME
WHILE SEEKING TO MAINTAIN A STABLE SHARE PRICE OF $1.00.
YIELD
THE FUND'S YIELD REFLECTS THE ACTUAL INCOME THE FUND PAYS TO YOU EXPRESSED AS A
PERCENTAGE OF THE FUND'S SHARE PRICE. BECAUSE THE FUND'S INCOME FROM ITS
PORTFOLIO SECURITIES WILL FLUCTUATE, THE INCOME IT IN TURN DISTRIBUTES TO YOU
AND THE FUND'S YIELD WILL VARY.
[End Sidebar]

ACTIVE ASSETS PREMIER MONEY TRUST

[ICON] INVESTMENT OBJECTIVES
--------------------------------------------------------------------------------

The Fund is a money market fund that seeks high current income,
preservation of capital and liquidity.

The Fund's investments include the following money
market securities:

<TABLE>
<S> <C>
- Commercial paper;
- Corporate obligations;
- Debt obligations of U.S.-regulated banks and instruments
secured by those obligations (including certificates of
deposit);
- Certificates of deposit of savings banks and savings and
loan associations;
- Debt obligations issued or guaranteed as to principal and
interest by the U.S. government, its agencies or
instrumentalities;
- Repurchase agreements (which may be viewed as a type of
secured lending by the Fund); and
- Foreign bank obligations.
</TABLE>

[ICON] PRINCIPAL RISKS
--------------------------------------------------------------------------------

There is no assurance that the Fund will achieve its investment
objectives.

5
<PAGE>
[Sidebar]
ANNUAL FUND
OPERATING EXPENSES
THESE EXPENSES ARE DEDUCTED FROM THE FUND'S ASSETS AND ARE BASED ON EXPENSES
PAID FOR THE FISCAL PERIOD ENDED JUNE 30, 2000.
[End Sidebar]
CREDIT AND INTEREST RATE RISKS. Principal risks of investing in the
Fund are associated with its debt obligation investments. All debt
obligations, such as bonds, are subject to two types of risk: credit
risk and interest rate risk. Credit risk refers to the possibility
that the issuer of a security will be unable to make interest
payments and/or repay the principal on its debt. Interest rate risk
refers to fluctuations in the value of a debt security resulting from
changes in the general level of interest rates.

<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
--------------------------------------------------------------------
Management Fee 0.01%
--------------------------------------------------------------------
Distribution and service (12b-1) fees 0.00%
--------------------------------------------------------------------
Other expenses 0.29%
--------------------------------------------------------------------
Total annual Fund operating expenses(1) 0.30%
--------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C>
(1) The fees and expenses disclosed above reflect that the
Investment Manager has agreed under its Investment
Management Agreement with the Fund to assume the Fund's
operating expenses (except for brokerage fees) to the extent
such operating expenses exceed on an annualized basis 0.30%
of the average daily net assets of the Fund. If the Fund had
borne all of its expenses that were assumed or waived by the
Investment Manager, the annualized expense ratios would have
been as follows: (i) management fee: 0.25%;
(ii) distribution and service (12b-1) fee: 0.00%;
(iii) other expenses: 0.29%; and (iv) total annual Fund
operating expenses: 0.54%.
</TABLE>

6
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C>
-------------------------
$31 $96
-------------------------
</TABLE>

The Fund commenced operations on February 15, 2000 and as of the date
of this PROSPECTUS did not have a full calendar year of performance
to report.

7
<PAGE>
[Sidebar]
MORGAN STANLEY DEAN WITTER ADVISORS INC.
THE INVESTMENT MANAGER IS WIDELY RECOGNIZED AS A LEADER IN THE MUTUAL FUND
INDUSTRY AND TOGETHER WITH MORGAN STANLEY DEAN WITTER SERVICES COMPANY INC., ITS
WHOLLY-OWNED SUBSIDIARY, HAD APPROXIMATELY $150 BILLION IN ASSETS UNDER
MANAGEMENT AS OF JULY 31, 2000.
[End Sidebar]

FUND MANAGEMENT

Each Fund has retained the Investment Manager -- Morgan Stanley Dean
Witter Advisors Inc. -- to provide administrative services, manage
its business affairs and invest its assets, including the placing of
orders for the purchase and sale of portfolio
securities. The Investment Manager is a wholly-owned
subsidiary of Morgan Stanley Dean Witter & Co., a
preeminent global financial services firm that
maintains leading market positions in each of its
three primary businesses: securities, asset
management and credit services. Its main business
office is located at Two World Trade Center, New
York, NY 10048.

Each Fund pays the Investment Manager a monthly
management fee as full compensation for the services
and facilities furnished to the Fund, and for Fund
expenses assumed by the Investment Manager,
calculated by applying the following annual rates to
the net assets of the Fund:

<TABLE>
<CAPTION>
INVESTMENT MANAGEMENT FEE
(AS A PERCENT OF THE FUND'S
FUND AVERAGE DAILY NET ASSETS)
<S> <C>
--------------------------------------------------------------------------------------------
Active Assets Institutional Money Trust 0.15%
--------------------------------------------------------------------------------------------
Active Assets Premier Money Trust 0.25%
--------------------------------------------------------------------------------------------
</TABLE>

The Investment Manager has agreed under each respective Investment Management
Agreement to assume Fund operating expenses (except for brokerage fees) to the
extent that such operating expenses exceed 0.20% of the average daily net assets
for Active Assets Institutional Money Trust and 0.30% of the average daily net
assets for Active Assets Premier Money Trust, which may reduce the investment
management fee below 0.15% and 0.25%, respectively, of the Funds' average daily
net assets. For example, in the case of Active Assets Premier Money Trust, if
"other expenses" are estimated to be 0.06% of the Fund's average daily net
assets, then the investment management fee rate paid by the Fund would equal
0.24% of the Fund's average daily net assets. If in the future "other expenses"
decline to 0.05% of the Fund's average daily net assets, the investment
management fee paid by the Fund would equal 0.25% of the Fund's average daily
net assets.

8
<PAGE>
[Sidebar]
CONTACTING A FINANCIAL ADVISOR
IF YOU ARE NEW TO THE
MORGAN STANLEY DEAN
WITTER FAMILY OF FUNDS AND
WOULD LIKE TO CONTACT A
FINANCIAL ADVISOR, CALL
(877) 937-MSDW (TOLL-FREE)
FOR THE TELEPHONE NUMBER OF
THE MORGAN STANLEY DEAN
WITTER OFFICE NEAREST YOU.
YOU MAY ALSO ACCESS OUR OFFICE LOCATOR ON OUR INTERNET SITE AT:
www.msdw.com/individual/funds
[End Sidebar]

SHAREHOLDER INFORMATION

[ICON] PRICING FUND SHARES
--------------------------------------------------------------------------------
The price of each Fund's shares, called "net asset value," is based
on the amortized cost of the Fund's portfolio securities. The
amortized cost valuation method involves valuing a debt obligation in
reference to its cost, rather than market forces.

The net asset value per share of each Fund is determined once daily
at 12:00 noon Eastern time on each day that the New York Stock
Exchange is open (or, on days when the New York Stock Exchange closes
prior to 12:00 noon, at such earlier time). Shares will not be priced
on days that the New York Stock Exchange is closed.

[ICON] HOW ARE FUND INVESTMENTS MADE?
--------------------------------------------------------------------------------

Cash balances in your Financial Service Program account (through the
Active Assets program or the BusinesScape program) that are not
invested in securities will be automatically invested in shares of
the Fund of your choice on each day that the New York Stock Exchange
is open for business. You may select any fund offered for investment
to Financial Service Program participants, including the Funds and
Active Assets Money Trust, Active Assets Tax-Free Trust, Active
Assets California Tax-Free Trust and Active Assets Government
Securities Trust. In each case, please read the respective fund's
prospectus carefully prior to making an investment decision.
Alternatively, if you are a participant in the Active Assets program,
you may choose to have your cash balances deposited in a federally
insured bank account designated by Dean Witter Reynolds Inc. rather
than invested in a fund. You may change your investment selection at
any time by notifying your Morgan Stanley Dean Witter Financial
Advisor. Upon selecting a different fund, your shares held in the
previously designated fund will automatically be sold and reinvested
in shares of the newly selected fund.

WIRING MONEY TO YOUR ACCOUNT

To purchase Fund shares by wiring federal funds to your account,
contact your Morgan Stanley Dean Witter Financial Advisor. If your
wire is received prior to 12:00 noon Eastern time, your money will be
invested in shares of the selected Fund on that day at the Fund's
share price calculated on that day.

AUTOMATIC PURCHASES

Your account will be reviewed on each business day to determine
whether the account has a cash balance as a result of any credits
accrued that day. Credits to your account may arise, for example,
from sales of securities or from direct cash payments into the

9
<PAGE>
account. Debits to your account may arise from purchases of
securities, margin calls, other account charges (including, in the
case of your BusinesScape account, any principal and/or interest owed
on your commercial line of credit, if applicable), debit card
purchases, cash advances or withdrawals, and any checks written
against the account. The cash balance, reduced by any debits to your
account incurred that day, will be used to purchase shares of your
selected Fund on the next business day at the Fund's share price
calculated on that next day. However, if you make a cash payment into
your account (by check) after your Financial Advisor's deadline for
processing checks has passed, then investment in the Fund may not
occur until the second business day after the payment is made (at the
share price calculated on that day).

ALL PURCHASES

You begin earning dividends the same day your Fund shares are
purchased.

[ICON] HOW ARE FUND SHARES SOLD?
--------------------------------------------------------------------------------

VOLUNTARY SALES

If you wish to sell all or some of your Fund shares, you may do so
by:

(a) instructing your Morgan Stanley Dean Witter Financial Advisor to
wire transfer federal funds to your bank;

(b) writing a check against your account in an amount equal to the
value of shares you wish to sell (there may be fees imposed for
writing these checks); or

Once you have taken any of these steps, your sale will normally be
processed on that same day at the Fund's share price calculated that
day. If you submit a wire instruction to sell shares before 12:00
noon Eastern time, you will receive payment of your sale proceeds on
that day. If you submit your instruction after that time, your shares
will be sold on the next business day and you will receive the
proceeds from the sale on that next day. If you seek to sell Fund
shares by writing a check against your account, Fund shares will not
be sold until the day on which the check is presented for payment.
Prior to selling any Fund shares through any of the above methods you
should call your Morgan Stanley Dean Witter Financial Advisor or the
applicable information number appearing on the cover of this
PROSPECTUS to determine the value of Fund shares you own. If there is
an insufficient value of Fund shares to cover your account
withdrawals, then Dean Witter Reynolds Inc. may take the authorized
steps described in your client account agreement. If you seek to sell
shares by wire instruction, the amount covered in

10
<PAGE>
the instruction may not exceed the value of Fund shares you hold less
any debits accrued to your account; otherwise, the wire instruction
will be refused and you will need to resubmit the instruction for a
lesser amount.

AUTOMATIC SALES

NEGATIVE BALANCES IN YOUR ACCOUNT. Your account will be reviewed on
each business day to determine whether the account has a negative
balance as a result of debits incurred on that day. Of course, the
negative balance will be reduced by any credits accrued to the
account on that day. On the same day, a sufficient number of your
Fund shares will automatically be sold to equal the value of the
negative balance. The sale price of the Fund's shares will be the
share price calculated on that day. If the value of your Fund shares
is insufficient to equal the negative balance, Dean Witter Reynolds
Inc. is authorized to take the actions described in your client
account agreement, including, if you are eligible, applying a margin
loan to your account or accessing your line of credit, as applicable,
to cover outstanding debits.

In addition, if Dean Witter Reynolds Inc. exercises its right to
terminate the Financial Service Program you are invested in, then all
of your Fund shares will be sold.

INSUFFICIENT INVESTMENT AMOUNTS. If your investment in a Fund falls
below the Fund's minimum investment requirement, your Fund shares
will be sold and the proceeds will be reinvested as follows:

<TABLE>
<CAPTION>
IF THE VALUE OF YOUR INVESTMENT IS LESS THAN YOUR PROCEEDS WILL BE INVESTED IN
<S> <C>
-------------------------------------------------------------------------------------------------
$10 million but at least $5 million Active Assets Premier Money Trust
-------------------------------------------------------------------------------------------------
$5 million Active Assets Money Trust
-------------------------------------------------------------------------------------------------
</TABLE>

You should be aware that Active Assets Money Trust is subject to
higher annual expenses than either Fund. In addition, if your
investment is reinvested in shares of Active Assets Money Trust, you
will lose one or more day's dividend because of the timing difference
between the way the funds earn dividends. Please consult Active
Assets Money Trust's prospectus for more details.

The value of your investment will be tracked on a 30-day rolling
average basis. In the event the value of your investment does not
meet the minimum investment requirement for your Fund, we will
provide you notice that allows you 30 days to increase your
investment amount to satisfy the Fund's minimum investment
requirement. A pattern of frequent notices may result in the Fund, in
its discretion, automatically selling your shares, even if you meet
the minimum investment requirement at the time of such sale. However,
your shares will not be sold unless you had previously received a
notice alerting you that the next time the value of your shares falls
below your Fund's investment minimum (based on a 30-day rolling
average basis) your shares will automatically be sold.

11
<PAGE>
ALL SALES

You will not earn a dividend on the day your shares are sold.

Payment for Fund shares sold may be postponed or the right to have
Fund shares sold may be suspended under unusual circumstances. If you
request to sell shares that were recently purchased by check, your
sale will not be effected until it has been verified that the check
has been honored.

[ICON] DISTRIBUTIONS
--------------------------------------------------------------------------------

Each Fund passes substantially all of its earnings along to its
investors as "distributions." Each Fund earns interest from
fixed-income investments. These amounts are passed along to Fund
shareholders as "income dividend distributions." Each Fund realizes
capital gains whenever it sells securities for a higher price than it
paid for them. These amounts may be passed along as "capital gain
distributions." The Investment Manager does not anticipate that there
will be significant capital gain distributions.

Each Fund declares income dividends, payable on each day the New York
Stock Exchange is open for business, of all of its daily net
investment income to shareholders of record as of 12:00 noon Eastern
time the same day (or, on days when the New York Stock Exchange
closes early, at such earlier time). Dividends are reinvested
automatically in additional shares of the respective Fund (rounded to
the last 1/100 of a share). Short-term capital gains, if any, are
distributed periodically. Long-term capital gains, if any, are
distributed at least once in December.

[ICON] TAX CONSEQUENCES
--------------------------------------------------------------------------------
As with any investment, you should consider how your investment in a
Fund will be taxed. The tax information in this PROSPECTUS is
provided as general information. You should consult your own tax
professional about the tax consequences of an investment in a Fund.

Your distributions are normally subject to federal and state income
tax when they are paid. A distribution also may be subject to local
income tax. Any income dividend distributions and any short-term
capital gain distributions are taxable to you as ordinary income. Any
long-term capital gain distributions are taxable as long-term capital
gains, no matter how long you have owned shares in a Fund.

Every January, you will be sent a statement (IRS Form 1099-DIV)
showing the taxable distributions paid to you in the previous year.
The statement provides information on your dividends and capital
gains for tax purposes.

12
<PAGE>
When you open your Fund account, you should provide your social
security or tax identification number. By providing this information,
you will avoid being subject to a federal backup withholding tax of
31% on taxable distributions and sale proceeds. Any withheld amount
would be sent to the IRS as an advance tax payment.

13
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance since the commencement of operations. Certain information
reflects financial results for a single Fund share throughout the period. The
total return in the table represents the rate an investor would have earned or
lost on an investment in the Fund (assuming reinvestment of all dividends and
distributions.)

This information has been audited by Deloitte & Touche LLP, independent
accountants, whose report, along with the Fund's financial statements, is
included in this PROSPECTUS.

<TABLE>
<CAPTION>
FOR THE
PERIOD
FEBRUARY 15,
2000*
THROUGH JUNE
30, 2000
<S> <C>
------------------------------------------------------------

SELECTED PER SHARE DATA:
------------------------------------------------------------
Net asset value, beginning of period $ 1.00
------------------------------------------------------------
Net income from investment operations 0.023
------------------------------------------------------------
Less dividends from net investment income (0.023)
------------------------------------------------------------
Net asset value, end of period. $ 1.00
------------------------------------------------------------

TOTAL RETURN 2.31%(1)
------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS:
------------------------------------------------------------
Expenses 0.20%(2)(3)
------------------------------------------------------------
Net investment income 6.12%(2)(3)
------------------------------------------------------------

SUPPLEMENTAL DATA:
------------------------------------------------------------
Net assets, end of period, in thousands. $813,428
------------------------------------------------------------
</TABLE>

* Commencement of operations.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all of its expenses that were reimbursed or waived by
the Investment Manager, the annualized expense and net investment income
ratios would have been 0.31% and 6.01%, respectively for the period ended
June 30, 2000.

SEE NOTES TO FINANCIAL STATEMENTS

14
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000

<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD
AMOUNT IN AND ON DATE OF
THOUSANDS MATURITY DATES PURCHASE VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMERCIAL PAPER (46.7%)
BANKING (1.8%)
$ 5,000 Citicorp
08/24/00........................................................ 6.64% $ 4,952,622
10,000 Morgan (J.P.) & Co. Inc.
07/10/00........................................................ 6.57 9,987,361
------------
14,939,983
------------
CONSTRUCTION/AGRICULTURAL/EQUIPMENT/TRUCKS (1.7%)
14,000 Caterpillar Financial Services Corp.
07/06/00........................................................ 6.52 13,992,475
------------
DIVERSIFIED FINANCIAL SERVICES (6.7%)
30,000 Associates Corp. of North America
07/11/00........................................................ 6.61 29,956,333
24,800 General Electric Capital Corp.
09/07/00 - 12/29/00............................................. 6.28 - 6.97 24,174,558
------------
54,130,891
------------
DIVERSIFIED MANUFACTURING (2.8%)
23,000 Honeywell International
07/19/00 - 08/25/00............................................. 6.56 - 6.65 22,865,457
------------
FINANCE - AUTOMOTIVE (4.6%)
13,000 DaimlerChrysler North America Holding Corp. 08/28/00.............. 6.76 12,865,522
25,000 Ford Motor Credit Co.
07/06/00........................................................ 6.82 24,985,813
------------
37,851,335
------------
FINANCE - CONSUMER (3.0%)
19,800 New Center Asset Trust
07/17/00 - 09/12/00............................................. 6.14 - 6.68 19,679,354
5,000 Norwest Financial Inc.
08/16/00........................................................ 6.62 4,959,972
------------
24,639,326
------------
FINANCE - CORPORATE (5.1%)
27,000 CIT Group Inc.
07/07/00 - 08/22/00............................................. 6.63 - 6.64 26,861,923
15,000 Ciesco, L.P.
08/22/00........................................................ 6.62 14,863,542
------------
41,725,465
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

15
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000, CONTINUED

<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD
AMOUNT IN AND ON DATE OF
THOUSANDS MATURITY DATES PURCHASE VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
INTERNATIONAL BANKS (7.9%)
$ 10,000 Barclays U.S. Funding Corp.
07/05/00........................................................ 6.79% $ 9,996,233
10,000 Commerzbank U.S. Finance Inc.
08/23/00........................................................ 6.75 9,905,934
8,950 Cregem North America Inc.
09/11/00........................................................ 6.69 8,835,490
20,000 Deutsche Bank Financial Inc.
07/31/00 - 08/24/00............................................. 6.60 - 6.64 19,876,322
10,000 Dresdner U.S. Finance Inc.
09/06/00........................................................ 6.70 9,881,014
6,000 UBS Finance (Delaware) LLC
09/05/00........................................................ 6.71 5,929,600
------------
64,424,593
------------
INVESTMENT BANKERS/BROKERS/SERVICES (3.1%)
20,000 Goldman Sachs Group Inc.
07/05/00 - 08/18/00............................................. 6.63 - 6.64 19,952,606
5,000 Merrill Lynch & Co. Inc.
07/13/00........................................................ 6.58 4,990,972
------------
24,943,578
------------
MAJOR PHARMACEUTICALS (3.8%)
25,000 Merck & Co., Inc.
07/07/00........................................................ 6.86 24,980,972
6,000 Schering Corp.
09/19/00........................................................ 6.37 5,919,270
------------
30,900,242
------------
OILFIELD SERVICES/EQUIPMENT (3.1%)
25,000 Halliburton Co.
07/10/00........................................................ 6.62 24,968,072
------------
TELECOMMUNICATION EQUIPMENT (0.9%)
7,000 Motorola Inc.
07/26/00........................................................ 6.58 6,970,841
------------
UTILITIES (2.2%)
18,000 National Rural Utilities Coop Finance Corp.
08/17/00 - 09/27/00............................................. 6.63 - 6.71 17,792,124
------------

TOTAL COMMERCIAL PAPER
(COST $380,144,382).................................................................... 380,144,382
------------

U.S. GOVERNMENT AGENCIES (23.5%)
1,321 Federal Farm Credit Banks
01/30/01........................................................ 6.51 1,273,151
188,433 Federal Home Loan Banks
07/03/00 - 05/22/01............................................. 6.42 - 7.10 187,735,524
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

16
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000, CONTINUED

TOTAL U.S. GOVERNMENT AGENCIES
(COST $190,927,538).................................................................... 190,927,538
------------

CERTIFICATES OF DEPOSIT (8.1%)
6,000 Citibank, N.A.
10/03/00........................................................ 6.61 6,000,000
10,000 First Union National Bank
07/27/00........................................................ 6.65 10,000,000
10,000 Fleet National Bank
09/08/00........................................................ 6.73 10,000,000
15,000 Harris Trust & Savings Bank
07/03/00........................................................ 6.58 15,000,000
25,000 SunTrust Bank, Atlanta
07/21/00 - 09/11/00............................................. 6.65 - 6.70 25,000,000
------------

TOTAL CERTIFICATES OF DEPOSIT
(COST $66,000,000)..................................................................... 66,000,000
------------

SHORT-TERM BANK NOTE (2.2%)
18,000 Bank of America, N.A.
07/20/00 - 09/01/00
(COST $18,000,000).............................................. 6.25 - 6.82 18,000,000
------------

REPURCHASE AGREEMENT (19.5%)
158,416 Banc of America Securities LLC
6.90% due 07/03/00 (dated 06/30/00;
proceeds $158,507,089) (a)
(COST $158,416,000)............................................. 158,416,000
------------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (COST $813,487,920) (b) ................................................ 100.0% 813,487,920

LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... 0.0 (59,625)
------ ------------

NET ASSETS................................................................................ 100.0% $813,428,295
------ ------------
------ ------------
</TABLE>

---------------------

(a) Collateralized by $54,440,512 Federal Home Loan Mortgage Corp. 6.00% -
7.50% due 03/01/07 - 06/01/30 valued at $48,938,784; and $128,347,040
Federal National Mortgage Assoc. 6.00% - 8.50% due 07/01/14 - 07/01/30
valued at $112,645,536.
(b) Cost is the same for federal income tax purposes.

SEE NOTES TO FINANCIAL STATEMENTS

17
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(cost $813,487,920)......................................................................... $813,487,920
Cash.......................................................................................... 10,498
Interest receivable........................................................................... 710,174
Deferred offering costs....................................................................... 78,644
Prepaid expenses.............................................................................. 13,482
------------

TOTAL ASSETS............................................................................. 814,300,718
------------

LIABILITIES:
Payable for:
Dividends to shareholders................................................................. 439,469
Investment management fee................................................................. 105,324
Offering costs................................................................................ 64,660
Accrued expenses.............................................................................. 262,970
------------

TOTAL LIABILITIES........................................................................ 872,423
------------

NET ASSETS............................................................................... $813,428,295
============

COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $813,380,139
Undistributed net investment income........................................................... 48,239
Net realized loss............................................................................. (83)
------------

NET ASSETS............................................................................... $813,428,295
============

NET ASSET VALUE PER SHARE,
813,428,295 SHARES OUTSTANDING
(UNLIMITED SHARES AUTHORIZED OF $.01 PAR VALUE)............................................. $1.00
============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

18
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE PERIOD FEBRUARY 15, 2000* THROUGH JUNE 30, 2000

<TABLE>
<S> <C>
NET INVESTMENT INCOME:

INTEREST INCOME................................................................................ $13,225,324
-----------

EXPENSES
Investment management fee...................................................................... 312,994
Registration fees.............................................................................. 232,106
Offering costs................................................................................. 48,156
Professional fees.............................................................................. 36,839
Custodian fees................................................................................. 17,222
Trustees' fees and expenses.................................................................... 3,866
Other.......................................................................................... 2,212
-----------

TOTAL EXPENSES............................................................................ 653,395

Less: amounts waived/reimbursed................................................................ (236,070)
-----------

NET EXPENSES.............................................................................. 417,325
-----------

NET INVESTMENT INCOME:.................................................................... 12,807,999

NET REALIZED LOSS......................................................................... (83)
-----------

NET INCREASE................................................................................... $12,807,916
===========
</TABLE>

---------------------

* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS

19
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

FOR THE PERIOD
FEBRUARY 15, 2000*
THROUGH
JUNE 30, 2000
------------------------------------------------------------------------------------------------------------

<S> <C>
INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment income............................................................... $ 12,807,999
Net realized loss................................................................... (83)
----------------------

NET INCREASE................................................................... 12,807,916

Dividends to shareholders from net investment income................................ (12,807,916)

Net increase from transactions in shares of beneficial interest..................... 813,328,295
----------------------

NET INCREASE................................................................... 813,328,295

NET ASSETS:
Beginning of period................................................................. 100,000
----------------------

END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $48,239)...................... $ 813,428,295
======================
</TABLE>

---------------------

* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS

20
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000

1. ORGANIZATION AND ACCOUNTING POLICIES

Active Assets Institutional Money Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is high
current income, preservation of capital and liquidity. The Fund was organized as
a Massachusetts business trust on November 23, 1999 and had no operations other
than those relating to organizational matters and issuance of 100,000 shares of
beneficial interest for $100,000 to Morgan Stanley Dean Witter Advisors Inc.
(The "Investment Manager"), to effect the Fund's initial capitalization. The
Fund commenced operations on February 15, 2000.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS -- Portfolio securities are valued at amortized
cost, which approximates market value.

B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
The Fund amortizes premiums and accretes discounts over the life of the
respective securities. Interest income is accrued daily.

C. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable and nontaxable income to its
shareholders. Accordingly, no federal income tax provision is required.

D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to shareholders as of the close of each business day.

E. OFFERING COSTS -- The Investment Manager incurred offering costs on behalf
of the Fund in the amount of approximately $126,800 which will be reimbursed by
the Fund for the full amount thereof. Such expenses were deferred and are being
amortized by the Fund on the straight-line method over the period of benefit of
approximately one year or less from the commencement of operations.

21
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000, CONTINUED

2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement with the Investment Manager, the
Fund pays the Investment Manager a management fee, accrued daily and payable
monthly, by applying the annual rate of 0.15% to the net assets of the Fund
determined as of the close of each business day.

The Investment Manager has agreed to reimburse all operating expenses and to
waive the compensation provided for in its Investment Management Agreement to
the extent that such expenses and compensation on an annualized basis exceed
0.20% of the daily net assets of the Fund.

3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales/maturities of portfolio securities
for the period ended June 30, 2000 aggregated $27,896,094,696 and
$27,089,033,373, respectively.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager is
the Fund's transfer agent.

4. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest, at $1.00 per share, were as
follows:

<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 15,
2000*
THROUGH
JUNE 30, 2000
---------------
<S> <C>
Shares sold...................................................... 2,224,090,621
Shares issued in reinvestment of dividends....................... 12,368,447
--------------
2,236,459,068
Shares repurchased............................................... (1,423,130,773)
--------------
Net increase in shares outstanding............................... 813,328,295
==============
</TABLE>

---------------------

* Commencement of operations.

5. FEDERAL INCOME TAX STATUS

As of June 30, 2000, the Fund had a permanent book/tax difference attributable
to nondeductible expenses. To reflect reclassification arising from this
difference, paid-in-capital was charged and undistributed net investment income
was credited $48,156.

22
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

We have audited the accompanying statement of assets and liabilities of Active
Assets Institutional Money Trust (the "Fund"), including the portfolio of
investments, as of June 30, 2000, and the related statements of operations and
changes in net assets, and financial highlights for the period February 15, 2000
(commencement of operations) to June 30, 2000. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at
June 30, 2000 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Active Assets
Institutional Money Trust as of June 30, 2000, the results of its operations,
the changes in its net assets and the financial highlights for the period
February 15, 2000 (commencement of operations) to June 30, 2000 in conformity
with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
NEW YORK, NEW YORK
AUGUST 7, 2000

2000 FEDERAL TAX NOTICE (UNAUDITED)

Of the Fund's ordinary income dividends paid during the fiscal
year ended June 30, 2000, 3.25% was attributable to qualifying
Federal obligations. Please consult your tax advisor to determine
if any portion of the dividends you received is exempt from state
income tax.

23
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
CHANGE IN INDEPENDENT ACCOUNTANTS

On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.

The report of PricewaterhouseCoopers LLP on the financial statement of the Fund
as of
January 7, 2000 contained no adverse or disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope or accounting principle.

From January 7, 2000 through July 1, 2000 there have been no disagreements with
PricewaterhouseCoopers LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of PricewaterhouseCoopers LLP
would have caused them to make reference thereto in their report on the
financial statement.

On July 1, 2000, the Fund, with the approval of its Board of Trustees and its
Audit Committee, engaged Deloitte & Touche LLP as its new independent
accountants for the period ended
June 30, 2000.

24
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
FINANCIAL HIGHLIGHTS

This information has been audited by Deloitte & Touche LLP, independent
accountants, whose report, along with the Fund's financial statements, is
included in this PROSPECTUS.

<TABLE>
<CAPTION>
FOR THE
PERIOD
FEBRUARY 15,
2000*
THROUGH JUNE
30, 2000
<S> <C>
------------------------------------------------------------

SELECTED PER SHARE DATA:
------------------------------------------------------------
Net asset value, beginning of period $ 1.00
------------------------------------------------------------
Net income from investment operations 0.023
------------------------------------------------------------
Less dividends from net investment income (0.023)
------------------------------------------------------------
Net asset value, end of period $ 1.00
------------------------------------------------------------

TOTAL RETURN 2.29%(1)
------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS:
------------------------------------------------------------
Expenses 0.30%(2)(3)
------------------------------------------------------------
Net investment income 6.02%(2)(3)
------------------------------------------------------------

SUPPLEMENTAL DATA:
------------------------------------------------------------
Net assets, end of period, in thousands $215,942
------------------------------------------------------------
</TABLE>

* Commencement of operations.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all of its expenses that were reimbursed or waived by
the Investment Manager, the annualized expense and net investment income
ratios would have been 0.54% and 5.78%, respectively for the period ended
June 30, 2000.

SEE NOTES TO FINANCIAL STATEMENTS

25
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000

<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD
AMOUNT IN AND ON DATE OF
THOUSANDS MATURITY DATES PURCHASE VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMERCIAL PAPER (77.7%)
BANKING (2.7%)
$ 6,000 Morgan (J.P.) & Co. Inc.
09/05/00........................................................ 6.69% $ 5,929,813
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS (1.4%)
3,050 Caterpillar Financial Services Corp. 07/06/00..................... 6.52 3,048,361
------------
DIVERSIFIED FINANCIAL SERVICES (6.4%)
7,000 Associates First Capital Corp.
08/02/00 - 08/29/00............................................. 6.60 - 6.79 6,951,597
7,000 General Electric Capital Corp.
09/07/00 - 12/28/00............................................. 6.28 - 6.88 6,874,241
------------
13,825,838
------------
DIVERSIFIED MANUFACTURING (2.8%)
6,000 Honeywell International
07/25/00........................................................ 6.68 5,975,763
------------
FINANCE - AUTOMOTIVE (12.9%)
4,000 American Honda Finance Corp.
07/07/00........................................................ 6.57 3,997,111
7,000 BMW U.S. Capital Corp.
08/08/00........................................................ 6.61 6,954,220
7,000 DaimlerChrysler North America Holding Corp.
09/12/00........................................................ 6.69 6,909,160
6,000 Ford Motor Credit Co.
07/10/00........................................................ 6.60 5,992,358
4,000 General Motors Acceptance Corp.
07/21/00........................................................ 6.57 3,986,940
------------
27,839,789
------------
FINANCE - CONSUMER (10.2%)
7,000 American Express Credit Corp.
08/14/00........................................................ 6.60 6,946,672
7,600 New Center Asset Trust
07/17/00 - 08/30/00............................................. 6.14 - 6.66 7,557,067
7,500 Norwest Financial Inc.
07/11/00 - 08/16/00............................................. 6.61 - 6.62 7,469,433
------------
21,973,172
------------
FINANCE - CORPORATE (5.7%)
5,500 CIT Group Inc.
07/19/00 - 08/11/00............................................. 6.63 - 6.65 5,467,187
7,000 Ciesco, L.P.
07/06/00........................................................ 6.60 6,996,173
------------
12,463,360
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

26
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000, CONTINUED

<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD
AMOUNT IN AND ON DATE OF
THOUSANDS MATURITY DATES PURCHASE VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
FOOD & BEVERAGES (5.5%)
$ 7,000 Coca-Cola Co.
08/15/00........................................................ 6.60% $ 6,945,402
5,000 Heinz (H.J.) Co.
07/12/00........................................................ 6.60 4,991,825
------------
11,937,227
------------
INSURANCE (1.4%)
3,000 American General Finance Corp.
08/22/00........................................................ 6.62 2,972,708
------------
INTERNATIONAL BANKS (9.2%)
6,000 Barclays U.S. Funding Corp.
07/05/00........................................................ 6.79 5,997,740
4,000 Commerzbank U.S. Finance Inc.
08/23/00........................................................ 6.75 3,962,373
4,000 Deutsche Bank Financial Inc.
08/28/00........................................................ 6.75 3,958,685
3,000 UBS Finance (Delaware) LLC
09/05/00........................................................ 6.71 2,964,800
3,000 Westpac Capital Corp.
08/24/00........................................................ 6.74 2,971,270
------------
19,854,868
------------
INVESTMENT BANKERS/BROKERS/SERVICES (3.7%)
6,000 Goldman Sachs Group Inc.
07/05/00 - 08/18/00............................................. 6.63 - 6.64 5,981,774
2,000 Merrill Lynch & Co. Inc.
07/12/00 - 07/13/00............................................. 6.56 - 6.58 1,996,574
------------
7,978,348
------------
MAJOR CHEMICALS (1.0%)
2,125 Dupont (E.I.) De Nemours
07/07/00........................................................ 6.57 2,123,465
------------
MAJOR U.S. TELECOMMUNICATIONS (2.8%)
6,000 AT&T Corp.
07/13/00........................................................ 6.61 5,989,067
------------
OILFIELD SERVICES/EQUIPMENT (1.4%)
3,000 Halliburton Co.
07/10/00........................................................ 6.57 2,996,208
------------
PHARMACEUTICALS (2.3%)
4,000 Merck & Co., Inc.
07/07/00........................................................ 6.86% 3,996,956
1,000 Schering Corp.
09/19/00........................................................ 6.37 986,545
------------
4,983,501
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

27
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000, CONTINUED

TOTAL COMMERCIAL PAPER
(COST $167,769,038).................................................................... 167,769,038
------------

CERTIFICATES OF DEPOSIT (6.0%)
1,000 Citibank, N.A.
10/03/00........................................................ 6.61 1,000,000
3,000 First Union National Bank
07/27/00........................................................ 6.65 3,000,000
4,000 Fleet National Bank
09/08/00........................................................ 6.73 4,000,000
5,000 Harris Trust & Savings Bank
07/03/00........................................................ 6.58 5,000,000
------------

TOTAL CERTIFICATES OF DEPOSIT
(COST $13,000,000)..................................................................... 13,000,000
------------

U.S. GOVERNMENT AGENCY OBLIGATIONS (2.6%)
4,500 Federal Home Loan Banks
12/29/00 - 05/22/01............................................. 6.42 - 7.10 4,250,958
1,500 Federal Home Loan Mortgage Corp.
03/01/01........................................................ 6.45 1,439,148
------------

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $5,690,106)...................................................................... 5,690,106
------------

SHORT-TERM BANK NOTE (2.3%)
5,000 Bank of America N.A.
07/20/00 - 09/01/00
(COST $5,000,000)............................................... 6.25 - 6.82% 5,000,000
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

28
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000, CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION
AMOUNT IN AND
THOUSANDS MATURITY DATES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
REPURCHASE AGREEMENT (11.4%)
$ 24,526 Banc of America Securities LLC
6.90% due 07/03/00 (dated 06/30/00;
proceeds $24,540,102) (a)
(COST $24,526,000).............................................. $ 24,526,000
------------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(COST $215,985,144) (b)................................................................... 100.0% 215,985,144

LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... 0.0 (42,929)
------ ------------

NET ASSETS................................................................................ 100.0% $215,942,215
------ ------------
------ ------------
</TABLE>

---------------------

(a) Collateralized by $23,674,466 Federal Home Loan Mortgage Corp. 6.50% -
7.00% due 07/01/29 - 01/01/30 valued at $21,935,303; and $3,852,705 Federal
National Mortgage Assoc. 6.50% due 11/01/28 valued at $3,081,218.
(b) Cost is the same for federal income tax purposes.

SEE NOTES TO FINANCIAL STATEMENTS

29
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(cost $215,985,144)......................................................................... $215,985,144
Cash.......................................................................................... 22,206
Interest receivable........................................................................... 149,369
Deferred offering costs....................................................................... 78,644
Prepaid expenses.............................................................................. 2,297
------------

TOTAL ASSETS............................................................................. 216,237,660
------------

LIABILITIES:
Payable for:
Dividends to shareholders................................................................. 113,824
Investment management fee................................................................. 25,060
Offering costs................................................................................ 64,660
Accrued expenses.............................................................................. 91,901
------------

TOTAL LIABILITIES........................................................................ 295,445
------------

NET ASSETS............................................................................... $215,942,215
============

COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $215,894,059
Undistributed net investment income........................................................... 48,156
------------

NET ASSETS............................................................................... $215,942,215
============

NET ASSET VALUE PER SHARE,
215,942,215 SHARES OUTSTANDING
(UNLIMITED SHARES AUTHORIZED OF $.01 PAR VALUE)............................................. $1.00
============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

30
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE PERIOD FEBRUARY 15, 2000* THROUGH JUNE 30, 2000

<TABLE>
<S> <C>
NET INVESTMENT INCOME:

INTEREST INCOME................................................................................. $3,403,089
----------

EXPENSES
Investment management fee....................................................................... 134,340
Registration fees............................................................................... 63,165
Offering costs.................................................................................. 48,156
Professional fees............................................................................... 36,839
Trustees' fees and expenses..................................................................... 3,896
Custodian fees.................................................................................. 2,487
Transfer agent fees and expenses................................................................ 197
Other........................................................................................... 2,384
----------

TOTAL EXPENSES............................................................................. 291,464

Less: amounts waived/reimbursed................................................................. (130,256)
----------

NET EXPENSES............................................................................... 161,208
----------

NET INVESTMENT INCOME........................................................................... 3,241,881
==========
</TABLE>

---------------------

* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS

31
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

FOR THE PERIOD
FEBRUARY 15, 2000*
ENDED
JUNE 30, 2000
------------------------------------------------------------------------------------------------------------

<S> <C>
INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment income............................................................... $ 3,241,881
Dividends to shareholders from net investment income................................ (3,241,881)
Net increase from transactions in shares of beneficial interest..................... 215,842,215
----------------------

NET INCREASE................................................................... 215,842,215

NET ASSETS:
Beginning of period................................................................. 100,000
----------------------

END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $48,156)...................... $ 215,942,215
======================
</TABLE>

---------------------

* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS

32
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000

1. ORGANIZATION AND ACCOUNTING POLICIES

Active Assets Premier Money Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is high current
income, preservation of capital and liquidity. The Fund was organized as a
Massachusetts business trust on November 23, 1999 and had no operations other
than those relating to organizational matters and the issuance of 100,000 shares
of beneficial interest for $100,000 to Morgan Stanley Dean Witter Advisors Inc.
(the "Investment Manager"), to effect the Fund's initial capitalization. The
Fund commenced operations on February 15, 2000.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS -- Portfolio securities are valued at amortized
cost, which approximates market value.

D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends
and distributions to shareholders as of the close of each business day.

33
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000, CONTINUED

2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement with the Investment Manager, the
Fund pays the Investment Manager a management fee, accrued daily and payable
monthly, by applying the annual rate of 0.25% to the net assets of the Fund
determined as of the close of each business day.

3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales/maturities of portfolio securities
for the period ended June 30, 2000 aggregated $3,348,501,214 and $3,135,098,543,
respectively.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager is
the Fund's transfer agent.

4. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest, at $1.00 per share, were as
follows:

<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 15,
2000*
THROUGH
JUNE 30, 2000
---------------
<S> <C>
Shares sold...................................................... 419,255,828
Shares issued in reinvestment of dividends....................... 3,128,057
--------------
422,383,885
Shares repurchased............................................... (206,541,670)
--------------
Net increase in shares outstanding............................... 215,842,215
==============
</TABLE>

5. FEDERAL INCOME TAX STATUS

As of June 30, 2000, the Fund had a permanent book/tax difference attributed to
nondeductible expenses. To reflect reclassification arising from this
difference, paid-in-capital was charged and undistributed net investment income
was credited $48,156.

---------------------

* Commencement of operations.

34
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>

ACTIVE ASSETS PREMIER MONEY TRUST
INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
ACTIVE ASSETS PREMIER MONEY TRUST

We have audited the accompanying statement of assets and liabilities of Active
Assets Premier Money Trust (the "Fund"), including the portfolio of investments,
as of June 30, 2000, and the related statements of operations and changes in net
assets, and financial highlights for the period February 15, 2000 (commencement
of operations) to June 30, 2000. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Active Assets
Premier Money Trust as of June 30, 2000, the results of its operations, the
changes in its net assets and the financial highlights for the period
February 15, 2000 (commencement of operations) to June 30, 2000 in conformity
with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
NEW YORK, NEW YORK
AUGUST 7, 2000

2000 FEDERAL TAX NOTICE (UNAUDITED)

Of the Fund's ordinary income dividends paid during the fiscal
year ended June 30, 2000, 1.61% was attributable to qualifying
Federal obligations. Please consult your tax advisor to determine
if any portion of the dividends you received is exempt from state
income tax.

35
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>

ACTIVE ASSETS PREMIER MONEY TRUST
CHANGE IN INDEPENDENT ACCOUNTANTS

On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.

On July 1, 2000 the Fund, with the approval of its Board of Trustees and its
Audit Committee, engaged Deloitte & Touche LLP as its new independent
accountants for the period ended
June 30, 2000.

36
ACTIVE ASSETS PREMIER MONEY TRUST
<PAGE>
NOTES

----------------------------------------------------------

37
<PAGE>

PROSPECTUS - AUGUST 29, 2000

Additional information about the Funds' investments is available in the Funds'
ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS (the current annual report is
included in this PROSPECTUS). The Funds' STATEMENT OF ADDITIONAL INFORMATION
also provides additional information about the Funds. The STATEMENT OF
ADDITIONAL INFORMATION is incorporated herein by reference (legally is part of
this PROSPECTUS). For a free copy of any of these documents, to request other
information about the Funds, or to make shareholder inquiries, please call:

(800) 869-NEWS

You also may obtain information about the Funds by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:
www.msdw.com/individual/funds
Information about the Funds (including the STATEMENT OF ADDITIONAL INFORMATION)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (202) 942-8090. Reports and
other information about the Funds are available on the EDGAR database on the
SEC's Internet site (www.sec.gov) and copies of this information may be
obtained, after paying a duplicating fee, by electronic request at the following
E-mail address: [email protected], or by writing the Public Reference Section
of the SEC, Washington, DC 20549-0102.
ACTIVE ASSETS
INSTITUTIONAL MONEY TRUST
PREMIER MONEY TRUST

TWO SEPARATE MONEY MARKET
FUNDS OFFERED EXCLUSIVELY TO
PARTICIPANTS IN THE ACTIVE
ASSETS-Registered Trademark- OR BUSINESSCAPE-SM-
FINANCIAL SERVICE PROGRAMS
CLF#37854

(ACTIVE ASSETS INSTITUTIONAL MONEY TRUST'S INVESTMENT COMPANY ACT FILE NO. IS
811-9713)
(ACTIVE ASSETS PREMIER MONEY TRUST'S INVESTMENT COMPANY ACT FILE NO. IS
811-9711)
<PAGE>

<TABLE>
<S> <C>
STATEMENT OF ADDITIONAL INFORMATION ACTIVE ASSETS
AUGUST 29, 2000 INSTITUTIONAL
MONEY TRUST
ACTIVE ASSETS
PREMIER MONEY
TRUST
</TABLE>

--------------------------------------------------------------------------------

This STATEMENT OF ADDITIONAL INFORMATION is not a PROSPECTUS. The PROSPECTUS
(dated August 29, 2000) for Active Assets Institutional Money Trust and Active
Assets Premier Money Trust (each, a "Fund") may be obtained without charge from
the Funds at their address or telephone number listed below or from Dean Witter
Reynolds at any of its branch offices.

Active Assets Institutional Money Trust
Active Assets Premier Money Trust
Two World Trade Center
New York, New York 10048
(800) 869-NEWS
<PAGE>
TABLE OF CONTENTS
--------------------------------------------------------------------------------

<TABLE>
<S> <C>
I. History of the Funds..................................... 4

II. Description of the Funds and Their Investments and
Risks....................................................... 4

A. Classification......................................... 4

B. Investment Strategies and Risks........................ 4

C. Investment Objectives/Policies/Investment
Restrictions............................................. 6

III. Management of the Funds................................ 7

A. Board of Trustees...................................... 7

B. Management Information................................. 7

C. Compensation........................................... 11

IV. Control Persons and Principal Holders of Securities..... 13

V. Investment Management and Other Services................. 13

A. Investment Manager..................................... 13

B. Principal Underwriter.................................. 14

C. Services Provided by the Investment Manager............ 14

D. Other Service Providers................................ 15

E. Codes of Ethics........................................ 16

VI. Brokerage Allocation and Other Practices................ 16

A. Brokerage Transactions................................. 16

B. Commissions............................................ 16

C. Brokerage Selection.................................... 17

D. Directed Brokerage..................................... 17

E. Regular Broker-Dealers................................. 17

VII. Capital Stock and Other Securities..................... 18

VIII. Purchase, Redemption and Pricing of Shares............ 18

A. Purchase/Redemption of Shares.......................... 18

B. Offering Price......................................... 19

IX. Taxation of the Funds and Their Shareholders............ 20

X. Underwriters............................................. 22

XI. Calculation of Performance Data......................... 22

XII. Financial Statements................................... 22
</TABLE>

2
<PAGE>
GLOSSARY OF SELECTED DEFINED TERMS
--------------------------------------------------------------------------------

The terms defined in this glossary are frequently used in this STATEMENT OF
ADDITIONAL INFORMATION (other terms used occasionally are defined in the text of
the document).

"CUSTODIAN"--The Bank of New York is the Custodian of the Funds' assets.

"DEAN WITTER REYNOLDS"--Dean Witter Reynolds Inc., a wholly-owned broker-dealer
subsidiary of MSDW.

"DISTRIBUTOR"--Morgan Stanley Dean Witter Distributors Inc., a wholly-owned
broker-dealer subsidiary of MSDW.

"FINANCIAL ADVISORS"--Morgan Stanley Dean Witter authorized financial services
representatives.

"FUND"--Either of Active Assets Institutional Money Trust or Active Assets
Premier Money Trust, each a registered, no-load open-end investment company.

"INDEPENDENT TRUSTEES"--Trustees who are not "interested persons" (as defined by
the Investment Company Act) of the Funds.

"INVESTMENT MANAGER"--Morgan Stanley Dean Witter Advisors Inc., a wholly-owned
investment advisor subsidiary of MSDW.

"MORGAN STANLEY & CO."--Morgan Stanley & Co. Incorporated, a wholly-owned
broker-dealer subsidiary of MSDW.

"MORGAN STANLEY DEAN WITTER FUNDS"--Registered investment companies (i) for
which the Investment Manager serves as the investment advisor and (ii) that hold
themselves out to investors as related companies for investment and investor
services.

"MSDW"--Morgan Stanley Dean Witter & Co., a preeminent global financial services
firm.

"MSDW SERVICES COMPANY"--Morgan Stanley Dean Witter Services Company Inc., a
wholly-owned fund services subsidiary of the Investment Manager.

"TRANSFER AGENT"--Morgan Stanley Dean Witter Trust FSB, a wholly-owned transfer
agent subsidiary of MSDW.

"TRUSTEES"--The Board of Trustees of the Funds.

3
<PAGE>
I. HISTORY OF THE FUNDS
--------------------------------------------------------------------------------

Each Fund was organized as a Massachusetts business trust, under a separate
Declaration of Trust, on November 23, 1999.

II. DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS
--------------------------------------------------------------------------------

A. CLASSIFICATION

Each Fund is an open-end, diversified management investment company whose
investment objectives is to provide high current income, preservation of capital
and liquidity.

B. INVESTMENT STRATEGIES AND RISKS

The following discussion of the Funds' investment strategies and risks
should be read with the sections of the Funds' PROSPECTUS entitled "Principal
Investment Strategies" and "Principal Risks."

REPURCHASE AGREEMENTS. Each Fund may invest in repurchase agreements. When
cash may be available for only a few days, it may be invested by the Funds in
repurchase agreements until such time as it may otherwise be invested or used
for payments of obligations of the Funds. These agreements, which may be viewed
as a type of secured lending by the Funds, typically involve the acquisition by
the Funds of debt securities from a selling financial institution such as a
bank, savings and loan association or broker-dealer. The agreement provides that
a Fund will sell back to the institution, and that the institution will
repurchase, the underlying security serving as collateral at a specified price
and at a fixed time in the future, usually not more than seven days from the
date of purchase. The collateral will be marked-to-market daily to determine
that the value of the collateral, as specified in the agreement, does not
decrease below the purchase price plus accrued interest. If such a decrease
occurs, additional collateral will be requested and, when received, added to the
account to maintain full collateralization. The Funds will accrue interest from
the institution until the time when the repurchase is to occur. Although this
date is deemed by the Funds to be the maturity date of a repurchase agreement,
the maturities of securities subject to repurchase agreements are not subject to
any limits.

While repurchase agreements involve certain risks not associated with direct
investments in debt securities, the Funds follow procedures designed to minimize
such risks. These procedures include effecting repurchase transactions only with
large, well capitalized and well established financial institutions, whose
financial condition will be continually monitored by the Investment Manager
subject to procedures approved by the Trustees. In addition, as described above,
the value of the collateral underlying the repurchase agreement will always be
at least equal to the repurchase price which consists of the acquisition price
paid to the seller of the securities plus the accrued resale premium, which is
defined as the amount specified in the repurchase agreement or the daily
amortization of the difference between the acquisition price and the resale
price specified in the repurchase agreement. Such collateral will consist
entirely of securities that are direct obligations of, or that are fully
guaranteed as to principal and interest by, the United States or any agency
thereof, and/or certificates of deposit, bankers' acceptances which are eligible
for acceptance by a Federal Reserve Bank, and, if the seller is a bank, mortgage
related securities (as such term is defined in section 3(a)(41) of the
Securities Exchange Act of 1934) that, at the time the repurchase agreement is
entered into, are rated in the highest rating category by the Requisite NRSROs
(as defined under Rule 2a-7 of the Investment Company Act of 1940).
Additionally, Upon an Event of Insolvency (as defined under Rule 2a-7) with
respect to the seller, the collateral must qualify the repurchase agreement for
preferential treatment under a provision of applicable insolvency law providing
an exclusion from any automatic stay of creditors' rights against the seller. In
the event of a default or bankruptcy by a selling financial institution, the
Funds will seek to liquidate such collateral. However, the exercising of a
Fund's right to liquidate such collateral could involve certain costs or delays
and, to the extent that proceeds from any sale upon a default of the obligation
to repurchase were less than the repurchase price, the Funds could suffer a
loss. It is the current policy of each Fund not to invest in repurchase
agreements that do not mature within seven days if any such

4
<PAGE>
investment, together with any other illiquid assets held by the Fund, amounts to
more than 10% of its total assets. A Fund's investments in repurchase agreements
may at times be substantial when, in the view of the Fund's Investment Manager,
liquidity or other considerations warrant.

VARIABLE RATE AND FLOATING RATE OBLIGATIONS. Each Fund may invest in
variable rate and floating rate obligations. The interest rate payable on a
variable rate obligation is adjusted at predesignated periodic intervals and, on
a floating rate obligation, whenever there is a change in the market rate of
interest on which the interest rate payable is based. Other features may include
the right whereby a Fund may demand prepayment of the principal amount of the
obligation prior to its stated maturity (a "demand feature") and the right of
the issuer to prepay the principal amount prior to maturity. The principal
benefit of a variable rate obligation is that the interest rate adjustment
minimizes changes in the market value of the obligation. As a result, the
purchase of variable rate and floating rate obligations should enhance the
ability of the Funds to maintain a stable net asset value per share and to sell
obligations prior to maturity at a price that is approximately the full
principal amount of the obligations. The principal benefit to a Fund of
purchasing obligations with a demand feature is that liquidity, and the ability
of the Fund to obtain repayment of the full principal amount of an obligation
prior to maturity, is enhanced. The payment of principal and interest by issuers
of certain obligations purchased by a Fund may be guaranteed by letters of
credit or other credit facilities offered by banks or other financial
institutions. Such guarantees will be considered in determining whether an
obligation meets a Fund's investment quality requirements.

REVERSE REPURCHASE AGREEMENTS. Each Fund may also use reverse repurchase
agreements. Reverse repurchase agreements involve sales by a Fund of portfolio
assets concurrently with an agreement by the Fund to repurchase the same assets
at a later date at a fixed price. Generally, the effect of such a transaction is
that the Fund can recover all or most of the cash invested in the portfolio
securities involved during the term of the reverse repurchase agreement, while
it will be able to keep the interest income associated with those portfolio
securities. Such transactions are only advantageous if the interest cost to the
Fund of the reverse repurchase transaction is less than the cost of obtaining
the cash otherwise. Opportunities to achieve this advantage may not always be
available, and each Fund intends to use the reverse repurchase technique only
when it will be to its advantage to do so. Each Fund will establish a segregated
account with its Custodian bank in which it will maintain cash or cash
equivalents or other portfolio securities equal in value to its obligations in
respect of reverse repurchase agreements. Reverse repurchase agreements are
considered borrowings by the Funds and for purposes other than meeting
redemptions may not exceed 5% of each Fund's total assets.

PRIVATE PLACEMENTS. Each Fund may invest in commercial paper issued in
reliance on the so-called "private placement" exemption afforded by
Section 4(2) of the Securities Act of 1933 ("Securities Act") and which may be
sold to other institutional investors pursuant to Rule 144A under the Securities
Act. Rule 144A permits the Funds to sell restricted securities to qualified
institutional buyers without limitation. The Investment Manager, pursuant to
procedures adopted by the Trustees, will make a determination as to the
liquidity of each restricted security purchased by the Fund. If a restricted
security is determined to be "liquid," the security will not be included within
the category "illiquid securities."

LENDING PORTFOLIO SECURITIES. Each Fund may lend its portfolio securities
to brokers, dealers and other financial institutions, provided that the loans
are callable at any time by the Fund, and are at all times secured by cash or
cash equivalents, which are maintained in a segregated account pursuant to
applicable regulations and that are equal to at least 100% of the market value,
determined daily, of the loaned securities. The advantage of these loans is that
a Fund continues to receive the income on the loaned securities while at the
same time earning interest on the cash amounts deposited as collateral, which
will be invested in short-term obligations.

As with any extensions of credit, there are risks of delay in recovery and,
in some cases, even loss of rights in the collateral should the borrower of the
securities fail financially. However, these loans of portfolio securities will
only be made to firms deemed by the Funds' management to be creditworthy and
when the income which can be earned from such loans justifies the attendant
risks. Upon termination of the loan, the borrower is required to return the
securities to the Fund. Any gain or loss in the market price during the loan
period would inure to the Fund.

5
<PAGE>
When voting or consent rights which accompany loaned securities pass to the
borrower, a Fund will follow the policy of calling the loaned securities, to be
delivered within one day after notice, to permit the exercise of the rights if
the matters involved would have a material effect on the Fund's investment in
the loaned securities. The Funds will pay reasonable finder's, administrative
and custodial fees in connection with a loan of its securities.

C. INVESTMENT OBJECTIVES/POLICIES/INVESTMENT RESTRICTIONS

Each Fund's investment objectives, policies and restrictions listed below
have been adopted by the Funds as fundamental policies. Under the Investment
Company Act of 1940 (the "Investment Company Act"), a fundamental policy may not
be changed without the vote of a majority of the outstanding voting securities
of the applicable Fund. The Investment Company Act defines a majority as the
lesser of (a) 67% or more of the shares present at a meeting of shareholders, if
the holders of 50% of the outstanding shares of the applicable Fund are present
or represented by proxy; or (b) more than 50% of the outstanding shares of the
applicable Fund. For purposes of the following restrictions: (i) all percentage
limitations apply immediately after a purchase or initial investment; and
(ii) any subsequent change in any applicable percentage resulting from market
fluctuations or other changes in total or net assets does not require
elimination of any security from the portfolio, in each case, unless otherwise
noted or required by law.

Each Fund will:

1. Seek high current income, preservation of capital and liquidity.

Each Fund will not:

1. Borrow money, except for temporary or emergency purposes or to meet
redemption requests which might otherwise require the untimely disposition
of securities, provided that (i) borrowing in the aggregate may not exceed
33 1/3% of the value of the Fund's total assets (including the amount
borrowed); or mortgage, pledge or hypothecate any assets except in
connection with any such borrowing and in amounts not in excess of 33 1/3%
of the value of the Fund's total assets, and (ii) borrowing for purposes
other than meeting redemption requests may not exceed 5% of the value of the
Fund's total assets (including the amount borrowed).

2. With respect to 75% of its total assets, purchase any securities,
other than obligations of the U.S. government, or its agencies or
instrumentalities, if, immediately after such purchase, more than 5% of the
value of the Fund's total assets would be invested in securities of any one
issuer.

3. With respect to 75% of its total assets, purchase any securities,
other than obligations of the U.S. government, or its agencies or
instrumentalities, if, immediately after such purchase, more than 10% of the
outstanding securities of one issuer would be owned by the Fund (for this
purpose all indebtedness of an issuer shall be deemed a single class of
security).

4. Purchase any securities, other than obligations of banks or of the
U.S. government, or its agencies or instrumentalities, if, immediately after
such purchase, 25% or more of the value of the Fund's total assets would be
invested in the securities of issuers in the same industry; however, there
is no limitation as to investments in bank obligations or in obligations
issued or guaranteed by the U.S. government, its agencies or
instrumentalities.

5. Purchase any common stocks or other equity securities.

6. Make loans to others, except through the purchase of the permitted
debt obligations and repurchase agreements; and loans of portfolio
securities in excess of 10% of the value of the Fund's total assets, made in
accordance with guidelines established by the Fund's Board of Trustees,
including maintaining collateral from the borrower equal at all times to the
current market value of the securities loaned.

7. Purchase or sell real estate; however, the Fund may purchase
marketable securities issued by companies which invest in real estate or
interests therein.

6
<PAGE>
8. Purchase or sell commodities or commodity futures contracts, or
oil, gas or mineral exploration or development programs.

9. Underwrite securities of other issuers.

10. Issue senior securities as defined in the Investment Company Act
except insofar as the Fund may be deemed to have issued a senior security by
reason of: (a) entering into any repurchase agreement; (b) entering into any
reverse repurchase agreement; (c) purchasing any securities on a when-issued
or delayed delivery basis; or (d) borrowing money in accordance with
restrictions described above.

In addition, as a non-fundamental policy, each Fund may not invest in other
investment companies in reliance on Section 12(d)(1)(F), 12(d)(1)(G), or
12(d)(1)(J) of the Investment Company Act.

Notwithstanding any other investment policy or restriction, each Fund may
seek to achieve its investment objectives by investing all or substantially all
of its assets in another investment company having substantially the same
investment objectives and policies as the Fund.

III. MANAGEMENT OF THE FUNDS
--------------------------------------------------------------------------------

A. BOARD OF TRUSTEES

The Board of Trustees of each of the Funds oversees the management of each
Fund but does not itself manage the Fund. The Trustees review various services
provided by or under the direction of the Investment Manager to ensure that the
Funds' general investment policies and programs are properly carried out. The
Trustees also conduct their review to ensure that administrative services are
provided to the Funds in a satisfactory manner.

Under state law, the duties of the Trustees are generally characterized as a
duty of loyalty and a duty of care. The duty of loyalty requires a Trustee to
exercise his or her powers in the interest of the Funds and not the Trustee's
own interest or the interest of another person or organization. A Trustee
satisfies his or her duty of care by acting in good faith with the care of an
ordinarily prudent person and in a manner the Trustee reasonably believes to be
in the best interest of each Fund and its shareholders.

B. MANAGEMENT INFORMATION

TRUSTEES AND OFFICERS. The Board of each of the Funds consists of nine (9)
Trustees. These same individuals also serve as directors or trustees for all of
the Morgan Stanley Dean Witter Funds. Six Trustees (67% of the total number)
have no affiliation or business connection with the Investment Manager or any of
its affiliated persons and do not own any stock or other securities issued by
the Investment Manager's parent company, MSDW. These are the "non-interested" or
"independent" Trustees. The other three Trustees (the "management Trustees") are
affiliated with the Investment Manager.

The Trustees and executive officers of the Funds, their principal business
occupations during the last five years and their affiliations, if any, with the
Investment Manager, and with the Morgan Stanley Dean Witter Funds (there were 93
such Funds as of the calendar year ended December 31, 1999), are shown below.

7
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUNDS AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
--------------------------------------------- -----------------------------------------------
<S> <C>
Charles A. Fiumefreddo* (67) ................ Chairman, Director or Trustee and Chief
Chairman of the Board, Executive Officer of the Morgan Stanley Dean
Chief Executive Officer and Trustee Witter Funds; formerly Chairman, Chief
Two World Trade Center Executive Officer and Director of the
New York, New York Investment Manager, the Distributor and MSDW
Services Company; Executive Vice President and
Director of Dean Witter Reynolds; Chairman and
Director of the Transfer Agent; formerly
Director and/or officer of various MSDW
subsidiaries (until June 1998).

Edwin J. Garn (67) .......................... Director or Trustee of the Morgan Stanley Dean
Trustee Witter Funds; formerly United States Senator
c/o Summit Ventures LLC (R-Utah) (1974-1992) and Chairman, Senate
1 Utah Center Banking Committee (1980-1986); formerly Mayor
201 S. Main Street of Salt Lake City, Utah (1971-1974); formerly
Salt Lake City, Utah Astronaut, Space Shuttle Discovery (April
12-19, 1985); Vice Chairman, Huntsman
Corporation (chemical company); Director of
Franklin Covey (time management systems), BMW
Bank of North America, Inc. (industrial loan
corporation), United Space Alliance (joint
venture between Lockheed Martin and the Boeing
Company) and Nuskin Asia Pacific (multilevel
marketing); member of the Utah Regional
Advisory Board of Pacific Corp.; member of the
board of various civic and charitable
organizations.

Wayne E. Hedien (66) ........................ Retired; Director or Trustee of the Morgan
Trustee Stanley Dean Witter Funds; Director of the PMI
c/o Mayer, Brown & Platt Group, Inc. (private mortgage insurance);
Counsel to the Independent Trustees Trustee and Vice Chairman of the Field Museum
1675 Broadway of Natural History; formerly associated with
New York, New York the Allstate Companies (1966-1994), most
recently as Chairman of the Allstate
Corporation (March 1993-December 1994) and
Chairman and Chief Executive Officer of its
wholly-owned subsidiary, Allstate Insurance
Company (July 1989-December 1994); director of
various other business and charitable
organizations.
James F. Higgins* (52) ...................... Chairman of the Private Client Group of MSDW
Trustee (since August 2000); Director of the Transfer
Two World Trade Center Agent and Dean Witter Realty Inc.; Director or
New York, New York Trustee of the Morgan Stanley Dean Witter Funds
(since June 2000); previously President and
Chief Operating Officer of the Private Client
Group of MSDW (May 1999-August 2000), President
and Chief Operating Officer of Individual
Securities of MSDW (February 1997-May 1999),
President and Chief Operating Officer of Dean
Witter Securities of MSDW (1995-February 1997),
and President and Chief Operating Officer of
Dean Witter Financial (1989-1995) and Director
(1985-1997) of Dean Witter Reynolds.
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUNDS AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
--------------------------------------------- -----------------------------------------------
<S> <C>
Dr. Manuel H. Johnson (51) .................. Senior Partner, Johnson Smick International,
Trustee Inc., a consulting firm; Co-Chairman and a
c/o Johnson Smick International, Inc. founder of the Group of Seven Council (G7C), an
1133 Connecticut Avenue, N.W. international economic commission; Chairman of
Washington, D.C. the Audit Committee and Director or Trustee of
the Morgan Stanley Dean Witter Funds; Director
of Greenwich Capital Markets, Inc.
(broker-dealer), Independence Standards Board
(private sector organization governing
independence of auditors) and NVR, Inc. (home
construction); Chairman and Trustee of the
Financial Accounting Foundation (oversight
organization of the Financial Accounting
Standards Board); formerly Vice Chairman of the
Board of Governors of the Federal Reserve
System and Assistant Secretary of the U.S.
Treasury.
Michael E. Nugent (64) ...................... General Partner, Triumph Capital, L.P., a
Trustee private investment partnership; Chairman of the
c/o Triumph Capital, L.P. Insurance Committee and Director or Trustee of
237 Park Avenue the Morgan Stanley Dean Witter Funds; formerly
New York, New York Vice President, Bankers Trust Company and BT
Capital Corporation (1984-1988); director of
various business organizations.
Philip J. Purcell* (56) ..................... Chairman of the Board of Directors and Chief
Trustee Executive Officer of MSDW, DWR and Novus Credit
1585 Broadway Services Inc.; Director of MSDW Distributors;
New York, New York Director or Trustee of the Morgan Stanley Dean
Witter Funds; Director of American
Airlines, Inc. and its parent company,
AMR Corporation; Director and/or officer of
various MSDW subsidiaries.
John L. Schroeder (70) ...................... Retired; Chairman of the Derivatives Committee
Trustee and Director or Trustee of the Morgan Stanley
c/o Mayer, Brown & Platt Dean Witter Funds; Director of Citizens
Counsel to the Independent Trustees Utilities Company (telecommunications, gas,
1675 Broadway electric and water utilities company);
New York, New York formerly, Executive Vice President and Chief
Investment Officer of the Home Insurance
Company (August 1991-September 1995).
Mitchell M. Merin (47) ...................... President and Chief Operating Officer of Asset
President Management of MSDW (since December 1998);
Two World Trade Center President and Director (since April 1997) and
New York, New York Chief Executive Officer (since June 1998) of
the Investment Manager and MSDW Services
Company; Chairman, Chief Executive Officer and
Director of the Distributor (since June 1998);
Chairman and Chief Executive Officer (since
June 1998) and Director (since January 1998) of
the Transfer Agent; Director of various MSDW
subsidiaries; President of the Morgan Stanley
Dean Witter Funds (since May 1999); Trustee of
various Van Kampen investment companies (since
December 1999); previously Chief Strategic
Officer of the Investment Manager and MSDW
Services Company and Executive Vice President
of the Distributor (April 1997-June 1998), Vice
President of the Morgan Stanley Dean Witter
Funds (May 1997-April 1999), and Executive Vice
President of Dean Witter, Discover & Co.
</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUNDS AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
--------------------------------------------- -----------------------------------------------
<S> <C>
Barry Fink (45) ............................. General Counsel of Asset Management of MSDW
Vice President, Secretary and General Counsel (since May 2000); Executive Vice President
Two World Trade Center (since December 1999) and Secretary and General
New York, New York Counsel (since February 1997) and Director
(since July 1998) of the Investment Manager and
MSDW Services Company; Vice President,
Secretary and General Counsel of the Morgan
Stanley Dean Witter Funds (since February
1997); Vice President and Secretary of the
Distributor; previously Senior Vice President,
(March 1997-December 1999), First Vice
President, Assistant Secretary and Assistant
General Counsel of the Investment Manager and
MSDW Services Company.
Jonathan R. Page (53) ....................... Senior Vice President and Director of the Money
Vice President Market Group of the Investment Manager; Vice
Two World Trade Center President of various Morgan Stanley Dean Witter
New York, New York Funds.
Thomas F. Caloia (54) ....................... First Vice President and Assistant Treasurer of
Treasurer the Investment Manager, the Distributor and
Two World Trade Center MSDW Services Company; Treasurer of the Morgan
New York, New York Stanley Dean Witter Funds.
</TABLE>

------------------------
*Denotes Trustees who are "interested persons" of each Fund as defined by the
Investment Company Act.

In addition, RONALD E. ROBISON, Executive Vice President, Chief
Administrative Officer and Director of the Investment Manager and MSDW Services
Company, ROBERT S. GIAMBRONE, Senior Vice President of the Investment Manager,
MSDW Services Company, the Distributor and the Transfer Agent and Director of
the Transfer Agent, JOSEPH J. MCALINDEN, Executive Vice President and Chief
Investment Officer of the Investment Manager and Director of the Transfer Agent,
and PETER M. AVELAR and JAMES F. WILLISON, each, a Senior Vice President of the
Investment Manager and Director of the High Yield Group of the Investment
Manager and Director of the Tax-Exempt Fixed Income Group of the Investment
Manager, respectively, are Vice Presidents of each Fund.

In addition, MARILYN K. CRANNEY, TODD LEBO, LOU ANNE D. MCINNIS, CARSTEN
OTTO and RUTH ROSSI, First Vice Presidents and Assistant General Counsels of the
Investment Manager and MSDW Services Company, and NATASHA KASSIAN, Assistant
Vice President and Assistant General Counsel of the Investment Manager and MSDW
Services Company, are Assistant Secretaries of each Fund.

INDEPENDENT DIRECTORS/TRUSTEES AND THE COMMITTEES. Law and regulation
establish both general guidelines and specific duties for the independent
directors/trustees. The Morgan Stanley Dean Witter Funds seek as independent
directors/trustees individuals of distinction and experience in business and
finance, government service or academia; these are people whose advice and
counsel are in demand by others and for whom there is often competition. To
accept a position on the Funds' boards, such individuals may reject other
attractive assignments because the Funds make substantial demands on their time.
All of the independent directors/trustees serve as members of the Audit
Committee. In addition, three of the directors/trustees, including two
independent directors/trustees, serve as members of the Derivatives Committee
and the Insurance Committee.

The independent directors/trustees are charged with recommending to the full
board approval of management, advisory and administration contracts, Rule 12b-1
plans and distribution and underwriting agreements; continually reviewing Fund
performance; checking on the pricing of portfolio securities, brokerage
commissions, transfer agent costs and performance, and trading among Funds in
the same complex; and approving fidelity bond and related insurance coverage and
allocations, as well as other matters that arise from time to time. The
independent directors/trustees are required to select and nominate individuals
to fill any independent director/trustee vacancy on the board of any Fund that
has a Rule 12b-1 plan of distribution. Most of the Morgan Stanley Dean Witter
Funds have a Rule 12b-1 plan.

10
<PAGE>
The Audit Committee is charged with recommending to the full board the
engagement or discharge of the Funds' independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing engagement;
approving professional services provided by the independent accountants and
other accounting firms prior to the performance of the services; reviewing the
independence of the independent accountants; considering the range of audit and
non-audit fees; reviewing the adequacy of the Funds' system of internal
controls; and preparing and submitting Committee meeting minutes to the full
board.

The board of each Fund has a Derivatives Committee to approve parameters for
and monitor the activities of the Fund with respect to derivative investments,
if any, made by either Fund.

Finally, the board of each Fund has formed an Insurance Committee to review
and monitor the insurance coverage maintained by the Fund.

ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT DIRECTORS/TRUSTEES FOR
ALL MORGAN STANLEY DEAN WITTER FUNDS. The independent directors/trustees and
the Funds' management believe that having the same independent
directors/trustees for each of the Morgan Stanley Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as independent directors/trustees for each of the Funds or
even of sub-groups of Funds. They believe that having the same individuals serve
as independent directors/trustees of all the Funds tends to increase their
knowledge and expertise regarding matters which affect the Fund complex
generally and enhances their ability to negotiate on behalf of each Fund with
the Fund's service providers. This arrangement also precludes the possibility of
separate groups of independent directors/trustees arriving at conflicting
decisions regarding operations and management of the Funds and avoids the cost
and confusion that would likely ensue. Finally, having the same independent
directors/trustees serve on all Fund boards enhances the ability of each Fund to
obtain, at modest cost to each separate Fund, the services of independent
directors/trustees, of the caliber, experience and business acumen of the
individuals who serve as independent directors/trustees of the Morgan Stanley
Dean Witter Funds.

TRUSTEE AND OFFICER INDEMNIFICATION. Each Fund's Declaration of Trust
provides that no Trustee, officer, employee or agent of the Fund is liable to
the Fund or to a shareholder, nor is any Trustee, officer, employee or agent
liable to any third persons in connection with the affairs of the Fund, except
as such liability may arise from his/her or its own bad faith, willful
misfeasance, gross negligence or reckless disregard of his/her or its duties. It
also provides that all third persons shall look solely to the Fund property for
satisfaction of claims arising in connection with the affairs of the Fund. With
the exceptions stated, each Fund's Declaration of Trust provides that a Trustee,
officer, employee or agent is entitled to be indemnified against all liability
in connection with the affairs of the Fund.

C. COMPENSATION

Each Fund pays each Independent Trustee an annual fee of $800 plus a per
meeting fee of $50 for meetings of the Board of Trustees, the Independent
Trustees or Committees of the Board of Trustees attended by the Trustee (each
Fund pays the Chairman of the Audit Committee an additional annual fee of $750,
and the Chairmen of the Derivatives and Insurance Committees additional annual
fees of $500). If a Board meeting and a meeting of the Independent Trustees or a
Committee meeting, or a meeting of the Independent Trustees and/or more than one
Committee meeting, take place on a single day, the Trustees are paid a single
meeting fee by each Fund. Each Fund also reimburses such Trustees for travel and
other out-of-pocket expenses incurred by them in connection with attending such
meetings. Trustees and officers of the Funds who are or have been employed by
the Investment Manager or an affiliated company receive no compensation or
expense reimbursement from the Funds for their services as Trustee.

At such time as the Funds have been in operation and have paid fees to the
Independent Trustees for a full fiscal year, and assuming that during such
fiscal year the Funds hold the same number of meetings of the boards, the
Independent Trustees and the Committees as were held by the other

11
<PAGE>
Morgan Stanley Dean Witter Funds during the calendar year ended December 31,
1999, it is estimated that the compensation paid to each Independent Trustee
during such fiscal year will be the amount shown in the following table.

FUND COMPENSATION (ESTIMATED)

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
FROM EACH
NAME OF INDEPENDENT TRUSTEE FUND
--------------------------- ------------
<S> <C>
Michael Bozic............................................... $1,600
Edwin J. Garn............................................... 1,600
Wayne E. Hedien............................................. 1,600
Dr. Manuel H. Johnson....................................... 2,350
Michael E. Nugent........................................... 2,100
John L. Schroeder........................................... 2,100
</TABLE>

The following table illustrates the compensation paid to the Funds'
Independent Trustees for the calendar year ended December 31, 1999 for services
to the 93 Morgan Stanley Dean Witter Funds that were in operation at
December 31, 1999.

CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
TOTAL CASH
COMPENSATION
FOR SERVICES TO
93 MORGAN
STANLEY
DEAN WITTER
NAME OF INDEPENDENT TRUSTEE FUNDS
--------------------------- ---------------
<S> <C>
Michael Bozic............................................... $134,600
Edwin J. Garn............................................... 138,700
Wayne E. Hedien............................................. 138,700
Dr. Manuel H. Johnson....................................... 208,638
Michael E. Nugent........................................... 193,324
John L. Schroeder........................................... 193,324
</TABLE>

As of the date of this STATEMENT OF ADDITIONAL INFORMATION, 55 of the Morgan
Stanley Dean Witter Funds, not including the Funds, have adopted a retirement
program under which an independent director/trustee who retires after serving
for at least five years (or such lesser period as may be determined by the
Board) as an independent director/trustee of any Morgan Stanley Dean Witter Fund
that has adopted the retirement program (each such Fund referred to as an
"Adopting Fund" and each such director/trustee referred to as an "Eligible
Trustee") is entitled to retirement payments upon reaching the eligible
retirement age (normally, after attaining age 72). Annual payments are based
upon length of service.

Currently, upon retirement, each Eligible Trustee is entitled to receive
from the Adopting Fund, commencing as of his or her retirement date and
continuing for the remainder of his or her life, an annual retirement benefit
(the "Regular Benefit") equal to 30.22% of his or her Eligible Compensation plus
0.5036667% of such Eligible Compensation for each full month of service as an
independent director/ trustee of any Adopting Fund in excess of five years up to
a maximum of 60.44% after ten years of service. The foregoing percentages may be
changed by the Board.(1) "Eligible Compensation" is one-fifth of the total
compensation earned by such Eligible Trustee for service to the Adopting Fund in
the five

------------------------
(1) An Eligible Trustee may elect alternative payments of his or her retirement
benefits based upon the combined life expectancy of the Eligible Trustee
and his or her spouse on the date of such Eligible Trustee's retirement. In
addition, the Eligible Trustee may elect that the surviving spouse's
periodic payment of benefits will be equal to a lower percentage of the
periodic amount when both spouses were alive. The amount estimated to be
payable under this method, through the remainder of the later of the lives
of the Eligible Trustee and spouse, will be the actuarial equivalent of the
Regular Benefit.

12
<PAGE>
year period prior to the date of the Eligible Trustee's retirement. Benefits
under the retirement program are accrued as expenses on the books of the
Adopting Funds. Such benefits are not secured or funded by the Adopting Funds.

The following table illustrates the retirement benefits accrued to the
Funds' Independent Trustees by the 55 Morgan Stanley Dean Witter Funds for the
year ended December 31, 1999, and the estimated retirement benefits for the
Independent Trustees, to commence upon their retirement from the 55 Morgan
Stanley Dean Witter Funds as of December 31, 1999.

RETIREMENT BENEFITS FROM ALL MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
---------------------------
ESTIMATED
CREDITED
YEARS OF ESTIMATED ESTIMATED ANNUAL
SERVICE AT PERCENTAGE RETIREMENT BENEFITS BENEFITS UPON
RETIREMENT OF ELIGIBLE ACCRUED AS EXPENSES RETIREMENT FROM
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION BY ALL ADOPTING FUNDS ALL ADOPTING FUNDS(2)
--------------------------- ------------ ------------ --------------------- ---------------------
<S> <C> <C> <C> <C>
Michael Bozic.............. 10 60.44% $20,933 $50,588
Edwin J. Garn.............. 10 60.44 31,737 50,675
Wayne E. Hedien............ 9 51.37 39,566 43,000
Dr. Manuel H. Johnson...... 10 60.44 13,129 75,520
Michael E. Nugent.......... 10 60.44 23,175 67,209
John L. Schroeder.......... 8 50.37 41,558 52,994
</TABLE>

------------------------
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1) on
page 12.

IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
--------------------------------------------------------------------------------

The following owned 5% or more of the outstanding shares of Active Assets
Institutional Money Trust on August 9, 2000: MGC Communications Inc.,
Attention: Sean Higman, 3291 N. Buffalo Drive 8, Las Vegas, NV
09129-7403--22.670%; Netrail Inc., 230 Peachtree Street, Suite 1700, Atlanta, GA
30303-1537--7.375%; KBRWJ Investors LO, Kathryn A. Hall, One Maritime Plaza
1450, San Francisco, CA 94111-3524--6.661; and Vertical Networks Inc.,
Attention: Mr. Virender K. Ahluwalia, 114 East Arques Avenue, Sunnyvale CA,
94085-4602--6.034%. The following owned 5% or more of the outstanding shares of
Active Assets Premier Money Trust on August 9, 2000: Van L. Philips Jr.,
P.O. Box 1873, Ranco Santa Fe, CA 92067-1873--6.193%.

V. INVESTMENT MANAGEMENT AND OTHER SERVICES
--------------------------------------------------------------------------------

A. INVESTMENT MANAGER

The Investment Manager to each Fund is Morgan Stanley Dean Witter Advisors
Inc., a Delaware corporation, whose address is Two World Trade Center, New York,
NY 10048. The Investment Manager is a wholly-owned subsidiary of MSDW, a
Delaware corporation. MSDW is a preeminent global financial services firm that
maintains leading market positions in each of its three primary businesses:
securities, asset management and credit services.

Pursuant to separate Investment Management Agreements (each, a "Management
Agreement") with the Investment Manager, each Fund has retained the Investment
Manager to provide administrative services and manage the investment of the
Fund's assets, including the placing of orders for the

13
<PAGE>
purchase and sale of portfolio securities. Each Fund pays the Investment Manager
monthly compensation calculated daily by applying the following annual rates to
the net assets of the Fund, determined as of the close of business on every
business day:

<TABLE>
<CAPTION>
INVESTMENT MANAGEMENT FEE
(AS A PERCENT OF FUND'S
FUND AVERAGE NET ASSETS)
<S> <C>
---------------------------------------------------------------------------------------
Active Assets Institutional Money Trust: 0.15%
---------------------------------------------------------------------------------------
Active Assets Premier Money Trust: 0.25%
---------------------------------------------------------------------------------------
</TABLE>

The Investment Manager has agreed under each Management Agreement to assume
Fund operating expenses (except for brokerage fees) to the extent that such
operating expenses exceed 0.20% of the average daily net assets for Active
Assets Institutional Money Trust and 0.30% for Active Assets Premier Money
Trust, which may reduce the investment management fee below 0.15% and 0.25%,
respectively, of the Funds' average daily net assets.

Taking these waivers and assumptions of expenses into accounts, for the
period February 15, 2000 (commencement of operations) through June 30, 2000, the
fees payable to the Investment Manager under its Management Agreement with
Active Assets Institutional Money Trust and Active Assets Premier Money Trust
amounted to $76,924 and $4,084, respectively.

The Investment Manager has retained its wholly-owned subsidiary, MSDW
Services Company, to perform administrative services for the Fund.

B. PRINCIPAL UNDERWRITER

Each Fund's principal underwriter is the Distributor (which has the same
address as the Investment Manager). In this capacity, each Fund's shares are
distributed by the Distributor. The Distributor has entered into a selected
dealer agreement with Dean Witter Reynolds, which through its own sales
organization sells shares of each Fund. In addition, the Distributor may enter
into similar agreements with other selected broker dealers. The Distributor, a
Delaware corporation, is a wholly-owned subsidiary of MSDW.

The Investment Manager compensates Dean Witter Reynolds' Financial Advisors
by paying them, from the Investment Manager's own funds, an annual residual
commission, currently of 0.03% and 0.05% of the current value of each account
for investors in Active Assets Institutional Money Trust and Active Assets
Premier Money Trust, respectively, for which they are the Financial Advisors of
record. The residual is a charge which reflects residual commissions paid by
Dean Witter Reynolds to its Financial Advisors and Dean Witter Reynolds'
expenses associated with the servicing of shareholders' accounts, including the
expenses of operating Dean Witter Reynolds' branch offices in connection with
the servicing of shareholders' accounts, which expenses include lease costs, the
salaries and employee benefits of operations and sales support personnel,
utility costs, communications costs and the costs of stationery and supplies and
other expenses relating to branch office servicing of shareholder accounts.

Each Fund and the Distributor have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act. Under the
Distribution Agreement, the Distributor uses its best efforts in rendering
services to the Fund, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations, the Distributor is
not liable to either Fund or any of their shareholders for any error of judgment
or mistake of law or for any act or omission or for any losses sustained by
either Fund or their shareholders.

C. SERVICES PROVIDED BY THE INVESTMENT MANAGER

The Investment Manager manages the investment of each Fund's assets,
including the placing of orders for the purchase and sale of portfolio
securities. The Investment Manager obtains and evaluates the information and
advice relating to the economy, securities markets, and specific securities as
it considers necessary or useful to continuously manage the assets of each Fund
in a manner consistent with its investment objective.

14
<PAGE>
Under the terms of each Management Agreement, in addition to managing each
Fund's investments, the Investment Manager maintains certain of each Fund's
books and records and furnishes, at its own expense, the office space,
facilities, equipment, clerical help, bookkeeping and certain legal services as
the Fund may reasonably require in the conduct of its business, including the
preparation of prospectuses, proxy statements and reports required to be filed
with federal and state securities commissions (except insofar as the
participation or assistance of independent accountants and attorneys is, in the
opinion of the Investment Manager, necessary or desirable). In addition, the
Investment Manager pays the salaries of all personnel, including officers of the
Funds, who are employees of the Investment Manager. The Investment Manager also
bears the cost of telephone service, heat, light, power and other utilities
provided to the Funds.

Expenses not expressly assumed by the Investment Manager under each
Management Agreement or by the Distributor, will be paid by the applicable Fund.
These expenses include, but are not limited to: charges and expenses of any
registrar, custodian, stock transfer and dividend disbursing agent; brokerage
commissions; taxes; engraving and printing share certificates; registration
costs; the cost and expense of printing, including typesetting, and distributing
prospectuses of each Fund and supplements thereto to the Funds' shareholders;
all expenses of shareholders' and Trustees' meetings and of preparing, printing
and mailing of proxy statements and reports to shareholders; fees and travel
expenses of Trustees or members of any advisory board or committee who are not
employees of the Investment Manager or any corporate affiliate of the Investment
Manager; all expenses incident to any dividend, withdrawal or redemption
options; charges and expenses of any outside service used for pricing of each
Fund's shares; fees and expenses of legal counsel, including counsel to the
Trustees who are not interested persons of the Funds or of the Investment
Manager (not including compensation or expenses of attorneys who are employees
of the Investment Manager); fees and expenses of each Fund's independent
accountants; membership dues of industry associations; interest on either Fund
borrowings; postage; insurance premiums on property or personnel (including
officers and Trustees) of each Fund which inure to its benefit; extraordinary
expenses (including, but not limited to, legal claims and liabilities and
litigation costs and any indemnification relating thereto); and all other costs
of each Fund's operation.

Each Management Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder, the Investment Manager is not liable to either Fund or
any of its investors for any act or omission by the Investment Manager or for
any losses sustained by either Fund or its investors.

Each Management Agreement will remain in effect from year to year, provided
continuance of each Management Agreement is approved at least annually by the
vote of the holders of a majority, as defined in the Investment Company Act, of
the outstanding shares of the applicable Fund, or by the Trustees; provided that
in either event such continuance is approved annually by the vote of a majority
of the Trustees of the applicable Fund, including a majority of the Independent
Trustees.

D. OTHER SERVICE PROVIDERS

(1) TRANSFER AGENT/DIVIDEND-PAYING AGENT

Morgan Stanley Dean Witter Trust FSB is the Transfer Agent for each Fund's
shares and the Dividend Disbursing Agent for payment of dividends and
distributions on each Fund's shares and agent for shareholders under various
investment plans. The principal business address of the Transfer Agent is
Harborside Financial Center, Plaza Two, Jersey City, NJ 07311.

(2) CUSTODIAN AND INDEPENDENT ACCOUNTANTS

The Bank of New York, 100 Church Street, New York, NY 10007, is the
Custodian for each Fund's assets. Any of the Funds' cash balances with the
Custodian in excess of $100,000 are unprotected by federal deposit insurance.
These balances may, at times, be substantial.

Deloitte & Touche LLP, Two World Financial Center, New York, NY 10281 serves
as the independent accountants of each Fund. The independent accountants are
responsible for auditing the annual financial statements of each Fund.

15
<PAGE>
(3) AFFILIATED PERSONS

The Transfer Agent is an affiliate of the Investment Manager, and of the
Distributor. As Transfer Agent and Dividend Disbursing Agent, the Transfer
Agent's responsibilities include maintaining shareholder accounts, disbursing
cash dividends and reinvesting dividends, processing account registration
changes, handling purchase and redemption transactions, mailing prospectuses and
reports, mailing and tabulating proxies, processing share certificate
transactions, and maintaining shareholder records and lists. For these services,
the Transfer Agent receives a per shareholder account fee from each Fund and is
reimbursed for its out-of-pocket expenses in connection with such services.

E. CODES OF ETHICS

The Funds, the Investment Manager and the Distributor have each adopted a
Code of Ethics pursuant to Rule 17j-1 under the Investment Company Act. The
Codes of Ethics are designed to detect and prevent improper personal trading.
The Codes of Ethics permit personnel subject to the Codes to invest in
securities, including securities that may be purchased, sold or held by the
Funds, subject to a number of restrictions and controls including prohibitions
against purchases of securities in an Initial Public Offering and a preclearance
requirement with respect to personal securities transactions.

VI. BROKERAGE ALLOCATION AND OTHER PRACTICES
--------------------------------------------------------------------------------

A. BROKERAGE TRANSACTIONS

Subject to the general supervision of the Trustees, the Investment Manager
is responsible for decisions to buy and sell securities for each Fund, the
selection of brokers and dealers to effect the transactions, and the negotiation
of brokerage commissions, if any. Purchases and sales of portfolio securities
are normally transacted through dealers, issuers or underwriters. Such
transactions are generally made on a net basis and do not involve payment of
brokerage commissions. The cost of securities purchased from an underwriter
usually includes a commission paid by the issuer to the underwriters;
transactions with dealers normally reflect the spread between bid and asked
prices.

During the period February 15, 2000 (commencement of operations) through
June 30, 2000, the Funds paid no such brokerage commissions or concessions.

B. COMMISSIONS

Pursuant to an order of the SEC, each Fund may effect principal transactions
in certain money market instruments with Dean Witter Reynolds. Each Fund will
limit its transactions with Dean Witter Reynolds to U.S. Government and
Government Agency Securities. The transactions will be effected with Dean Witter
Reynolds only when the price available from Dean Witter Reynolds is better than
that available from other dealers.

During the period February 15, 2000 (commencement of operations) through
June 30, 2000, the Funds did not effect any principal transactions with Dean
Witter Reynolds.

Brokerage transactions in securities listed on exchanges or admitted to
unlisted trading privileges may be effected through Dean Witter Reynolds, Morgan
Stanley & Co. and other affiliated brokers and dealers. In order for an
affiliated broker or dealer to effect any portfolio transactions on an exchange
for either Fund, the commissions, fees or other remuneration received by the
affiliated broker or dealer must be reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
an exchange during a comparable period of time. This standard would allow the
affiliated broker or dealer to receive no more than the remuneration which would
be expected to be received by an unaffiliated broker in a commensurate
arm's-length transaction. Furthermore, the Trustees, including the Independent
Trustees, have adopted procedures which are reasonably designed to provide that
any commissions, fees or other remuneration paid to an affiliated broker or
dealer are consistent with the foregoing standard. The Funds do not reduce the
management fee they pay to the Investment Manager by any amount of the brokerage
commissions they may pay to an affiliated broker or dealer.

During the period February 15, 2000 (commencement of operations) through
June 30, 2000, the Funds paid no brokerage commissions to an affiliated broker
or dealer.

16
<PAGE>
C. BROKERAGE SELECTION

The policy of each Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions.

In seeking to implement the Funds' policies, the Investment Manager effects
transactions with those brokers and dealers who the Investment Manager believes
provide the most favorable prices and are capable of providing efficient
executions. If the Investment Manager believes the prices and executions are
obtainable from more than one broker or dealer, it may give consideration to
placing portfolio transactions with those brokers and dealers who also furnish
research and other services to the Funds or the Investment Manager. The services
may include, but are not limited to, any one or more of the following:
information as to the availability of securities for purchase or sale;
statistical or factual information or opinions pertaining to investment; wire
services; and appraisals or evaluations of portfolio securities.

The information and services received by the Investment Manager from brokers
and dealers may be of benefit to the Investment Manager in the management of
accounts of some of its other clients and may not in all cases benefit the Funds
directly. While the receipt of such information and services is useful in
varying degrees and would generally reduce the amount of research or services
otherwise performed by the Investment Manager and thereby reduce its expenses,
it is of indeterminable value and the Funds do not reduce the management fee
they pay to the Investment Manager by any amount that may be attributable to the
value of such services.

Subject to the principle of obtaining best price and execution, the
Investment Manager may consider a broker-dealer's sales of shares of each Fund
as a factor in selecting from among those broker-dealers qualified to provide
comparable prices and execution on the Fund's portfolio transactions. The Funds
do not, however, require a broker-dealer to sell shares of the Fund, in order
for it to be considered to execute portfolio transactions, and will not enter
into any arrangement whereby a specific amount or percentage of the Funds'
transactions will be directed to a broker which sells shares of the Funds to
customers. The Trustees review, periodically, the allocation of brokerage orders
to monitor the operation of these policies.

The Investment Manager currently serves as investment manager to a number of
clients, including other investment companies, and may in the future act as
investment manager or advisor to others. It is the practice of the Investment
Manager to cause purchase and sale transactions to be allocated among the Funds
and others whose assets it manages in such manner as it deems equitable. In
making such allocations among the Funds and other client accounts, various
factors may be considered, including the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of investment commitments
generally held and the opinions of the persons responsible for managing the
portfolios of each Fund and other client accounts. In the case of certain
initial and secondary public offerings, the Investment Manager utilizes a pro
rata allocation process based on the size of the relevant funds and/or client
accounts involved and the number of shares available from the public offering.

D. DIRECTED BROKERAGE

During the fiscal period February 15, 2000 (commencement of operations)
through June 30, 2000, the Funds did not pay any brokerage commissions to
brokers because of research services provided.

E. REGULAR BROKER-DEALERS

At June 30, 2000, Active Assets Institutional Money Trust held securities
issued by: Banc of America Securities Inc with a market value of $158,416,000,
SunTrust Bank, Atlanta with a market value of $25,000,000, Goldman Sachs Group
Inc. with a market value of $19,952,606, Deutsche Bank Financial Inc. with a
market value of $19,876,322, Bank of America, N.A. with a market of $18,000,000,
Morgan (J.P.) and Co. Inc. with a market value of $9,987,361 and Merrill Lynch &
Co. Inc. with a market value of $4,990,972.

17
<PAGE>
At June 30, 2000, Active Assets Premier Money Trust held securities issued
by: Banc of America Securities LLC with a market value of $24,526,000, Goldman
Sachs Group Inc. with a market value of $5,981,774, Morgan (J.P.) & Co. Inc.
with a market value of $5,929,813, Bank of America, N.A. with a market value of
$5,000,000, Deutsche Bank Financial Inc. with a market value of $3,958,685 and
Merrill Lynch & Co. Inc. with a market value of $1,996,574.

VII. CAPITAL STOCK AND OTHER SECURITIES
--------------------------------------------------------------------------------

The shareholders of each Fund are entitled to a full vote for each full
share of beneficial interest held. The Funds are authorized to issue an
unlimited number of shares of beneficial interest. All shares of beneficial
interest of each Fund are of $0.01 par value and are equal as to earnings,
assets and voting privileges.

Each Fund's Declaration of Trust permits the Trustees to authorize the
creation of additional series of shares (the proceeds of which would be invested
in separate, independently managed portfolios) and additional classes of shares
within any series. The Trustees have not presently authorized any such
additional series of classes of shares other than as set forth in the
PROSPECTUS.

The Funds are not required to hold annual meetings of shareholders and in
ordinary circumstances the Funds do not intend to hold such meetings. The
Trustees may call special meetings of shareholders for action by shareholder
vote as may be required by the Investment Company Act or the Declaration of
Trust. Under certain circumstances, the Trustees may be removed by the actions
of the Trustees. In addition, under certain circumstances, the shareholders may
call a meeting to remove the Trustees, and the Funds are required to provide
assistance in communicating with shareholders about such a meeting. The voting
rights of shareholders are not cumulative, so that holders of more than
50 percent of the shares voting can, if they choose, elect all Trustees being
selected, while the holders of the remaining shares would be unable to elect any
Trustees.

Under Massachusetts law, shareholders of a business trust may, under certain
limited circumstances, be held personally liable as partners for the obligations
of each Fund. However, each Declaration of Trust contains an express disclaimer
of shareholder liability for acts or obligations of the respective Fund,
requires that notice of such Fund obligations include such disclaimer, and
provides for indemnification out of the Fund's property for any shareholder held
personally liable for the obligations of the Fund. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which a Fund itself would be unable to meet its
obligations. Given the above limitations on shareholder personal liability, and
the nature of each Fund's assets and operations, the possibility of a Fund being
unable to meet its obligations is remote and thus, in the opinion of
Massachusetts counsel to the Funds, the risk to each Fund's shareholders of
personal liability is remote.

The Trustees themselves have the power to alter the number and the terms of
office of the Trustees (as provided for in the Declaration of Trust), and they
may at any time lengthen or shorten their own terms or make their terms of
unlimited duration and appoint their own successors, provided that always at
least a majority of the Trustees has been elected by the shareholders of the
respective Fund.

VIII. PURCHASE, REDEMPTION AND PRICING OF SHARES
--------------------------------------------------------------------------------

A. PURCHASE/REDEMPTION OF SHARES

Information concerning how Fund shares are offered to the public (and how
they are redeemed) is provided in the Funds' PROSPECTUS.

TRANSFER AGENT AS AGENT. With respect to the redemption of the Funds'
shares or the application of proceeds to the purchase of new shares in a Fund,
the Transfer Agent acts as agent for the Distributor and for the shareholder's
authorized broker-dealer in the performance of such functions. With respect to

18
<PAGE>
redemptions, the Transfer Agent shall be liable for its own negligence and not
for the default or negligence of its correspondents or for losses in transit.
The Funds shall not be liable for any default or negligence of the Transfer
Agent, the Distributor or any authorized broker-dealer.

B. OFFERING PRICE

The price of each Fund's shares, called "net asset value," is based on the
value of each respective Fund's portfolio securities.

Each Fund utilizes the amortized cost method in valuing its portfolio
securities for purposes of determining the net asset value of its shares. Each
Fund utilizes the amortized cost method in valuing its portfolio securities even
though the portfolio securities may increase or decrease in market value,
generally in connection with changes in interest rates. The amortized cost
method of valuation involves valuing a security at its cost at the time of
purchase adjusted by a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price a Fund would receive if it sold the investment.
During such periods, the yield to investors in each Fund may differ somewhat
from that obtained in a similar company which uses marked-to-market values for
all of its portfolio securities. For example, if the use of amortized cost
resulted in a lower (higher) aggregate portfolio value on a particular day, a
prospective investor in either Fund would be able to obtain a somewhat higher
(lower) yield than would result from investment in such a similar company and
existing investors would receive less (more) investment income. The purpose of
this method of calculation is to facilitate the maintenance of a constant net
asset value per share of $1.00.

The use of the amortized cost method to value the portfolio securities of
each Fund and the maintenance of the per share net asset value of $1.00 is
permitted pursuant to Rule 2a-7 of the Act (the "Rule") and is conditioned on
its compliance with various conditions contained in the Rule including: (a) the
Trustees are obligated, as a particular responsibility within the overall duty
of care owed to the Funds' shareholders, to establish procedures reasonably
designed, taking into account current market conditions and each Fund's
investment objectives, to stabilize the net asset value per share as computed
for the purpose of distribution and redemption at $1.00 per share; (b) the
procedures include (i) calculation, at such intervals as the Trustees determine
are appropriate and as are reasonable in light of current market conditions, of
the deviation, if any, between net asset value per share using amortized cost to
value portfolio securities and net asset value per share based upon available
market quotations with respect to such portfolio securities; (ii) periodic
review by the Trustees of the amount of deviation as well as methods used to
calculate it; and (iii) maintenance of written records of the procedures, and
the Trustees' considerations made pursuant to them and any actions taken upon
such consideration; (c) the Trustees should consider what steps should be taken,
if any, in the event of a difference of more than 1/2 of 1% between the two
methods of valuation; and (d) the Trustees should take such action as they deem
appropriate (such as shortening the average portfolio maturity, realizing gains
or losses, withholding dividends or, as provided by the Declaration of Trust,
reducing the number of outstanding shares of either Fund) to eliminate or reduce
to the extent reasonably practicable material dilution or other unfair results
to investors or existing shareholders which might arise from differences between
the two method of valuation.

Generally, for purposes of the procedures adopted under the Rule, the
maturity of a portfolio security is deemed to be the period remaining
(calculated from the trade date or such other date on which a Fund's interest in
the instrument is subject to market action) until the date on which in
accordance with the terms of the security the principal amount must
unconditionally be paid, or in the case of a security called for redemption, the
date on which the redemption payment must be made.

A variable rate security that is subject to a demand feature is deemed to
have a maturity equal to the period remaining until the principal amount can be
recovered through demand. A floating rate security that is subject to a demand
feature is deemed to have a maturity equal to the period remaining until the
principal amount can be recovered through demand.

19
<PAGE>
An "NRSRO" is a nationally recognized statistical rating organization. The
term "Requisite NRSROs" means (i) any two NRSROs that have issued a rating with
respect to a security or class of debt obligations of an issuer, or (ii) if only
one NRSRO has issued a rating with respect to such security or issuer at the
time a fund purchases or rolls over the security, that NRSRO.

An Eligible Security is generally defined in the Rule to mean (i) a rated
security with a remaining maturity of 397 calendar days or less that has
received a rating from the Requisite NRSROs in one of the two highest short-term
rating categories (within which there may be sub-categories or gradations
indicating relative standing); or (ii) An Unrated Security that is of comparable
quality to a security meeting the requirements of (1) above, as determined by
the Trustees; (iii) In addition, in the case of a security that is subject to a
Demand Feature or Guarantee: (A) The Guarantee has received a rating from an
NRSRO or the Guarantee is issued by a guarantor that has received a rating from
an NRSRO with respect to a class of debt obligations (or any debt obligation
within that class) that is comparable in priority and security to the Guarantee,
unless: (1) the Guarantee is issued by a person that directly or indirectly,
controls, is controlled by or is under a common control with the issuer of the
security subject to the Guarantee (other than a sponsor or a Special Purpose
Entity with respect to an Asset Backed Security: (2) the security subject to the
Guarantee is a repurchase agreement that is Collateralized Fully; or (3) the
Guarantee itself is a Government Security and (B) the issuer of the Demand
Feature, or another institution, has undertaken promptly to notify the holder of
the security in the event the Demand Feature or Guarantee is substituted with
another Demand Feature or Guarantee (if such substitution is permissible under
the terms of the Demand Feature or Guarantee). Each Fund will limit its
investments to securities that meet the requirements for Eligible Securities.

As permitted by the Rule, the Trustees have delegated to the Funds'
Investment Manager the authority to determine which securities present minimal
credit risks and which unrated securities are comparable in quality to rated
securities.

Also, as required by the Rule, each Fund will limit its investments in
securities, other than Government securities, so that, at the time of purchase:
(a) except as further limited in (b) below with regard to certain securities, no
more than 5% of its total assets will be invested in the securities of any one
issuer; and (b) with respect to Eligible Securities that have received a rating
in less than the highest category by any one of the NRSROs whose ratings are
used to qualify the security as an Eligible Security, or that have been
determined to be of comparable quality: (i) no more than 5% in the aggregate of
each Fund's total assets in all such securities, and (ii) no more than the
greater of 1% of total assets, or $1 million, in the securities on any one
issuer.

The presence of a line of credit or other credit facility offered by a bank
or other financial institution which guarantees the payment obligation of the
issuer, in the event of a default in the payment of principal or interest of an
obligation, may be taken into account in determining whether an investment is an
Eligible Security, provided that the guarantee itself is an Eligible Security.

The Rule further requires that each Fund limit its investments to U.S.
dollar-denominated instruments which the Trustees determine present minimal
credit risks and which are Eligible Securities. The Rule also requires each Fund
to maintain a dollar-weighted average portfolio maturity (not more than 90 days)
appropriate to its objective of maintaining a stable net asset value of $1.00
per share and precludes the purchase of any instrument with a remaining maturity
of more than 397 days. Should the disposition of a portfolio security result in
a dollar-weighted average portfolio maturity of more than 90 days, the
applicable Fund will invest its available cash in such a manner as to reduce
such maturity to 90 days or less a soon as is reasonably practicable.

If the Trustees determine that it is no longer in the best interests of a
Fund and its shareholders to maintain a stable price of $1 per share or if the
Trustees believe that maintaining such price no longer reflects a market-based
net asset value per share, the Trustees have the right to change from an
amortized cost basis of valuation to valuation based on market quotations. The
Funds will notify their respective shareholders of any such change.

IX. TAXATION OF THE FUNDS AND THEIR SHAREHOLDERS
--------------------------------------------------------------------------------

Each Fund intends to declare and pay all of its net investment income (and
net short-term capital gains, if any) as dividends daily. Dividends are
automatically reinvested in additional Fund shares at net

20
<PAGE>
asset value. Net income, for dividend purposes, includes accrued interest and
amortization of acquisition, original issue and market discount, plus or minus
any short-term gains or losses realized on sales of portfolio securities, less
the amortization of market premium and the estimated expenses of each Fund,
respectively. Net income will be calculated immediately prior to the
determination of net asset value per share of each Fund.

The Trustees of the Funds may revise the dividend policy or postpone the
payment of dividends if a Fund should have or anticipate any large unexpected
expense, loss or fluctuation in net assets which, in the opinion of the
Trustees, might have a significant adverse effect on shareholders. On occasion,
in order to maintain a constant $1.00 per share net asset value, the Trustees
may direct that the number of outstanding shares be reduced in each
shareholder's account. Such reduction may result in taxable income to a
shareholder in excess of the net increase (i.e., dividends, less such
reductions), if any, in the shareholder's account for a period of time.
Furthermore, such reduction may be realized as a capital loss when the shares
are liquidated.

It has been and remains each Fund's policy and practice that, if checks for
dividends or distributions paid in cash remain uncashed, no interest will accrue
on amounts represented by such uncashed checks.

TAXES. Each Fund has qualified and intends to remain qualified as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986. If so qualified, the Funds will not be subject to federal income taxes,
provided that each Fund distributes all of its taxable net investment income and
all of its net realized gains to its shareholders.

Gains or losses on sales of securities by each Fund will be long-term
capital gains or losses if the securities have a tax holding period of more than
one year. Gains or losses on the sale of securities with a tax holding period of
one year or less will be short-term gains or losses.

Under certain tax rules, the Funds may be required to accrue a portion of
any discount at which certain securities are purchased as income each year even
though the Funds receive no payments in cash on the security during the year. To
the extent that the Funds invest in such securities, they would be required to
pay out such accrued discount as an income distribution in order to avoid
taxation at the Fund level. Such distributions will be made from the available
cash of the Funds or by liquidation of portfolio securities if necessary. If a
distribution of cash necessitates the liquidation of portfolio securities, the
Investment Manager will select which securities to sell. The Funds may realize a
gain or loss from such sales. In the event the Funds realize net capital gains
from such transactions, their shareholders may receive a larger capital gain
distribution, if any, than they would in the absence of such transactions.

Shareholders normally will be subject to federal income tax, and state
and/or local income taxes on dividends paid from interest income derived from
taxable securities and on distributions of realized net short-term capital gains
and long-term capital gains. Interest income and realized net short-term capital
gains distributions are taxable to the shareholder as ordinary dividend income
regardless of whether the shareholder receives such distributions in additional
shares or in cash. Net long-term capital gains distributions are taxable to the
shareholder as long-term capital gains, regardless of how long the shareholder
has held the Fund shares and regardless of whether the shareholder receives such
distribution in additional shares or in cash. Under current law, the maximum tax
rate on long-term capital gains realized by non-corporate shareholders is 20%.

It is not anticipated that the ordinary dividends or net long-term capital
gains distributions will be eligible for the federal dividends received
deduction available to corporations.

Shareholders who are not citizens or residents of the United States and
certain foreign entities may be subject to withholding of United States tax on
distributions made by the Funds of any taxable interest income and short-term
capital gains.

After the end of each calendar year, shareholders will be sent information
on their dividends and capital gain distributions for tax purposes, including
the portion taxable as ordinary income, the portion taxable as long-term capital
gains and the amount, if any, of dividends eligible for the federal dividends
received deduction for corporations.

21
<PAGE>
Each Fund may be subject to tax or taxes in certain states where it does
business. Furthermore, in those states which have income tax laws, the tax
treatment of the Fund and of shareholders with respect to distributions by the
Fund may differ from federal tax treatment.

Shareholders are urged to consult their own tax advisors regarding specific
questions as to federal, state or local taxes.

X. UNDERWRITERS
--------------------------------------------------------------------------------

Each Fund's shares are offered to the public on a continuous basis. The
Distributor, as the principal underwriter of the shares, has certain obligations
under the Distribution Agreement concerning the distribution of the shares.
These obligations and the compensation the Distributor receives are described
above in the section titled "Principal Underwriter."

XI. CALCULATION OF PERFORMANCE DATA
--------------------------------------------------------------------------------

Each Fund's annualized current yield, as may be quoted from time to time in
advertisements and other communications to shareholders and potential investors,
is computed by determining, for a stated seven-day period, the net change,
exclusive of capital changes and including the value of additional shares
purchased with dividends and any dividends declared therefrom (which reflect
deductions of all expenses of each Fund such as management fees), in the value
of a hypothetical pre-existing account having a balance of one share at the
beginning of the period, and dividing the difference by the value of the account
at the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7).

Each Fund's annualized effective yield, as may be quoted from time to time
in advertisements and other communications to shareholders and potential
investors, is computed by determining (for the same stated seven-day period as
for the current yield), the net change, exclusive of capital changes and
including the value of additional shares purchased with dividends and any
dividends declared therefrom (which reflect deductions of all expenses of each
Fund such as management fees), in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the period, and
dividing the difference by the value of the account at the beginning of the base
period to obtain the base period return, and then compounding the base period
return by adding 1, raising the sum to a power equal to 365 divided by 7, and
subtracting 1 from the result.

The yields quoted in any advertisement or other communication should not be
considered a representation of the yields of each Fund in the future since the
yield is not fixed. Actual yields will depend not only on the type, quality and
maturities of the investments held by each Fund and changes in interest rates on
such investments, but also on changes in each Fund's expenses during the period.

Yield information may be useful in reviewing the performance of a Fund and
for providing a basis for comparison with other investment alternatives.
However, unlike bank deposits or other investments which typically pay a fixed
yield for a stated period of time, each Fund's yield fluctuates.

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST'S current yield for the seven days
ended June 30, 2000 was 6.51%. The effective annual yield on June 30, 2000 was
6.72%, assuming daily compounding. ACTIVE ASSETS PREMIER MONEY TRUST'S current
yield for the seven days ended June 30, 2000 was 6.39%. The effective annual
yield on June 30, 2000 was 6.60%, assuming daily compounding.

XII. FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

EXPERTS. The financial statements of each Fund for its fiscal period ended
June 30, 2000 included in the PROSPECTUS, and included and incorporated by
reference in this STATEMENT OF ADDITIONAL INFORMATION have been so included and
incorporated in reliance on the report of Deloitte & Touche LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.

*****

This STATEMENT OF ADDITIONAL INFORMATION and the PROSPECTUS do not contain
all of the information set forth in the REGISTRATION STATEMENTS the Funds have
filed with the SEC. The complete REGISTRATION STATEMENT for each Fund may be
obtained from the SEC.

22
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
FINANCIAL HIGHLIGHTS

This information has been audited by Deloitte & Touche LLP, independent
accountants, whose report, along with the Fund's financial statements, is
included in the PROSPECTUS and STATEMENT OF ADDITIONAL INFORMATION.

<TABLE>
<CAPTION>
FOR THE
PERIOD
FEBRUARY 15,
2000*
THROUGH JUNE
30, 2000
<S> <C>
------------------------------------------------------------

TOTAL RETURN 2.31%(1)
------------------------------------------------------------

SUPPLEMENTAL DATA:
------------------------------------------------------------
Net assets, end of period, in thousands. $813,428
------------------------------------------------------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

23
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

24
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000, CONTINUED

<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD
AMOUNT IN AND ON DATE OF
THOUSANDS MATURITY DATES PURCHASE VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
INTERNATIONAL BANKS (7.9%)
$ 10,000 Barclays U.S. Funding Corp.
07/05/00........................................................ 6.79% $ 9,996,233
10,000 Commerzbank U.S. Finance Inc.
08/23/00........................................................ 6.75 9,905,934
8,950 Cregem North America Inc.
09/11/00........................................................ 6.69 8,835,490
20,000 Deutsche Bank Financial Inc.
07/31/00 - 08/24/00............................................. 6.60 - 6.64 19,876,322
10,000 Dresdner U.S. Finance Inc.
09/06/00........................................................ 6.70 9,881,014
6,000 UBS Finance (Delaware) LLC
09/05/00........................................................ 6.71 5,929,600
------------
64,424,593
------------
INVESTMENT BANKERS/BROKERS/SERVICES (3.1%)
20,000 Goldman Sachs Group Inc.
07/05/00 - 08/18/00............................................. 6.63 - 6.64 19,952,606
5,000 Merrill Lynch & Co. Inc.
07/13/00........................................................ 6.58 4,990,972
------------
24,943,578
------------
MAJOR PHARMACEUTICALS (3.8%)
25,000 Merck & Co., Inc.
07/07/00........................................................ 6.86 24,980,972
6,000 Schering Corp.
09/19/00........................................................ 6.37 5,919,270
------------
30,900,242
------------
OILFIELD SERVICES/EQUIPMENT (3.1%)
25,000 Halliburton Co.
07/10/00........................................................ 6.62 24,968,072
------------
TELECOMMUNICATION EQUIPMENT (0.9%)
7,000 Motorola Inc.
07/26/00........................................................ 6.58 6,970,841
------------
UTILITIES (2.2%)
18,000 National Rural Utilities Coop Finance Corp.
08/17/00 - 09/27/00............................................. 6.63 - 6.71 17,792,124
------------

TOTAL COMMERCIAL PAPER
(COST $380,144,382).................................................................... 380,144,382
------------

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

25
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000, CONTINUED

TOTAL U.S. GOVERNMENT AGENCIES
(COST $190,927,538).................................................................... 190,927,538
------------

TOTAL CERTIFICATES OF DEPOSIT
(COST $66,000,000)..................................................................... 66,000,000
------------

SHORT-TERM BANK NOTE (2.2%)
18,000 Bank of America, N.A.
07/20/00 - 09/01/00
(COST $18,000,000).............................................. 6.25 - 6.82 18,000,000
------------

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (COST $813,487,920) (b) ................................................ 100.0% 813,487,920

LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... 0.0 (59,625)
------ ------------

NET ASSETS................................................................................ 100.0% $813,428,295
------ ------------
------ ------------
</TABLE>

---------------------

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

26
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000

TOTAL ASSETS............................................................................. 814,300,718
------------

TOTAL LIABILITIES........................................................................ 872,423
------------

NET ASSETS............................................................................... $813,428,295
============

NET ASSET VALUE PER SHARE,
813,428,295 SHARES OUTSTANDING
(UNLIMITED SHARES AUTHORIZED OF $.01 PAR VALUE)............................................. $1.00
============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

27
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE PERIOD FEBRUARY 15, 2000* THROUGH JUNE 30, 2000

<TABLE>
<S> <C>
NET INVESTMENT INCOME:

INTEREST INCOME................................................................................ $13,225,324
-----------

TOTAL EXPENSES............................................................................ 653,395

Less: amounts waived/reimbursed................................................................ (236,070)
-----------

NET EXPENSES.............................................................................. 417,325
-----------

NET INVESTMENT INCOME:.................................................................... 12,807,999

NET REALIZED LOSS......................................................................... (83)
-----------

NET INCREASE................................................................................... $12,807,916
===========
</TABLE>

---------------------

* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

28
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

FOR THE PERIOD
FEBRUARY 15, 2000*
THROUGH
JUNE 30, 2000
------------------------------------------------------------------------------------------------------------

<S> <C>
INCREASE (DECREASE) IN NET ASSETS:

NET INCREASE................................................................... 12,807,916

Dividends to shareholders from net investment income................................ (12,807,916)

Net increase from transactions in shares of beneficial interest..................... 813,328,295
----------------------

NET INCREASE................................................................... 813,328,295

NET ASSETS:
Beginning of period................................................................. 100,000
----------------------

END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $48,239)...................... $ 813,428,295
======================
</TABLE>

---------------------

* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

29
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000

1. ORGANIZATION AND ACCOUNTING POLICIES

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS -- Portfolio securities are valued at amortized
cost, which approximates market value.

D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to shareholders as of the close of each business day.

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

30
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000, CONTINUED

2. INVESTMENT MANAGEMENT AGREEMENT

3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales/maturities of portfolio securities
for the period ended June 30, 2000 aggregated $27,896,094,696 and
$27,089,033,373, respectively.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager is
the Fund's transfer agent.

4. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest, at $1.00 per share, were as
follows:

---------------------

* Commencement of operations.

5. FEDERAL INCOME TAX STATUS

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

31
<PAGE>

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

Deloitte & Touche LLP
NEW YORK, NEW YORK
AUGUST 7, 2000

2000 FEDERAL TAX NOTICE (UNAUDITED)

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

32
<PAGE>
ACTIVE ASSETS INSTITUTIONAL MONEY TRUST
CHANGE IN INDEPENDENT ACCOUNTANTS

On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.

On July 1, 2000, the Fund, with the approval of its Board of Trustees and its
Audit Committee, engaged Deloitte & Touche LLP as its new independent
accountants for the period ended
June 30, 2000.

ACTIVE ASSETS INSTITUTIONAL MONEY TRUST

33
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
FOR THE
PERIOD
FEBRUARY 15,
2000*
THROUGH JUNE
30, 2000
<S> <C>
------------------------------------------------------------

SELECTED PER SHARE DATA:
------------------------------------------------------------
Net asset value, beginning of period $ 1.00
------------------------------------------------------------
Net income from investment operations 0.023
------------------------------------------------------------
Less dividends from net investment income (0.023)
------------------------------------------------------------
Net asset value, end of period $ 1.00
------------------------------------------------------------

TOTAL RETURN 2.29%(1)
------------------------------------------------------------

SUPPLEMENTAL DATA:
------------------------------------------------------------
Net assets, end of period, in thousands $215,942
------------------------------------------------------------
</TABLE>

* Commencement of operations.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all of its expenses that were reimbursed or waived by
the Investment Manager, the annualized expense and net investment income
ratios would have been 0.54% and 5.78%, respectively for the period ended
June 30, 2000.

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS PREMIER MONEY TRUST

34
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000

<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD
AMOUNT IN AND ON DATE OF
THOUSANDS MATURITY DATES PURCHASE VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMERCIAL PAPER (77.7%)
BANKING (2.8%)
$ 6,000 Morgan (J.P.) & Co. Inc.
09/05/00........................................................ 6.69% $ 5,929,813
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS (1.4%)
3,050 Caterpillar Financial Services Corp. 07/06/00..................... 6.52 3,048,361
------------
DIVERSIFIED FINANCIAL SERVICES (6.4%)
7,000 Associates First Capital Corp.
08/02/00 - 08/29/00............................................. 6.60 - 6.79 6,951,597
7,000 General Electric Capital Corp.
09/07/00 - 12/28/00............................................. 6.28 - 6.88 6,874,241
------------
13,825,838
------------
DIVERSIFIED MANUFACTURING (2.8%)
6,000 Honeywell International
07/25/00........................................................ 6.68 5,975,763
------------
FINANCE - AUTOMOTIVE (12.9%)
4,000 American Honda Finance Corp.
07/07/00........................................................ 6.57 3,997,111
7,000 BMW U.S. Capital Corp.
08/08/00........................................................ 6.61 6,954,220
7,000 DaimlerChrysler North America Holding Corp.
09/12/00........................................................ 6.69 6,909,160
6,000 Ford Motor Credit Co.
07/10/00........................................................ 6.60 5,992,358
4,000 General Motors Acceptance Corp.
07/21/00........................................................ 6.57 3,986,940
------------
27,839,789
------------
FINANCE - CONSUMER (10.2%)
7,000 American Express Credit Corp.
08/14/00........................................................ 6.60 6,946,672
7,600 New Center Asset Trust
07/17/00 - 08/30/00............................................. 6.14 - 6.66 7,557,067
7,500 Norwest Financial Inc.
07/11/00 - 08/16/00............................................. 6.61 - 6.62 7,469,433
------------
21,973,172
------------
FINANCE - CORPORATE (5.7%)
5,500 CIT Group Inc.
07/19/00 - 08/11/00............................................. 6.63 - 6.65 5,467,187
7,000 Ciesco, L.P.
07/06/00........................................................ 6.60 6,996,173
------------
12,463,360
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS PREMIER MONEY TRUST

35
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000, CONTINUED

<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD
AMOUNT IN AND ON DATE OF
THOUSANDS MATURITY DATES PURCHASE VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
FOOD & BEVERAGES (5.5%)
$ 7,000 Coca-Cola Co.
08/15/00........................................................ 6.60% $ 6,945,402
5,000 Heinz (H.J.) Co.
07/12/00........................................................ 6.60 4,991,825
------------
11,937,227
------------
INSURANCE (1.4%)
3,000 American General Finance Corp.
08/22/00........................................................ 6.62 2,972,708
------------
INTERNATIONAL BANKS (9.2%)
6,000 Barclays U.S. Funding Corp.
07/05/00........................................................ 6.79 5,997,740
4,000 Commerzbank U.S. Finance Inc.
08/23/00........................................................ 6.75 3,962,373
4,000 Deutsche Bank Financial Inc.
08/28/00........................................................ 6.75 3,958,685
3,000 UBS Finance (Delaware) LLC
09/05/00........................................................ 6.71 2,964,800
3,000 Westpac Capital Corp.
08/24/00........................................................ 6.74 2,971,270
------------
19,854,868
------------
INVESTMENT BANKERS/BROKERS/SERVICES (3.7%)
6,000 Goldman Sachs Group Inc.
07/05/00 - 08/18/00............................................. 6.63 - 6.64 5,981,774
2,000 Merrill Lynch & Co. Inc.
07/12/00 - 07/13/00............................................. 6.56 - 6.58 1,996,574
------------
7,978,348
------------
MAJOR CHEMICALS (1.0%)
2,125 Dupont (E.I.) De Nemours
07/07/00........................................................ 6.57 2,123,465
------------
MAJOR U.S. TELECOMMUNICATIONS (2.8%)
6,000 AT&T Corp.
07/13/00........................................................ 6.61 5,989,067
------------
OILFIELD SERVICES/EQUIPMENT (1.4%)
3,000 Halliburton Co.
07/10/00........................................................ 6.57 2,996,208
------------
PHARMACEUTICALS (2.3%)
4,000 Merck & Co., Inc.
07/07/00........................................................ 6.86% 3,996,956
1,000 Schering Corp.
09/19/00........................................................ 6.37 986,545
------------
4,983,501
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS PREMIER MONEY TRUST

36
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000, CONTINUED

TOTAL COMMERCIAL PAPER
(COST $167,769,038).................................................................... 167,769,038
------------

TOTAL CERTIFICATES OF DEPOSIT
(COST $13,000,000)..................................................................... 13,000,000
------------

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $5,690,106)...................................................................... 5,690,106
------------

SHORT-TERM BANK NOTE (2.6%)
5,000 Bank of America N.A.
07/20/00 - 09/01/00
(COST $5,000,000)............................................... 6.25 - 6.82% 5,000,000
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS PREMIER MONEY TRUST

37
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000, CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION
AMOUNT IN AND
THOUSANDS MATURITY DATES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
REPURCHASE AGREEMENT (11.1%)
$ 24,526 Banc of America Securities LLC
6.90% due 07/03/00 (dated 06/30/00;
proceeds $24,540,102) (a)
(COST $24,526,000).............................................. $ 24,526,000
------------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(COST $215,985,144) (b)................................................................... 100.0% 215,985,144

LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... 0.0 (42,929)
------ ------------

NET ASSETS................................................................................ 100.0% $215,942,215
------ ------------
------ ------------
</TABLE>

---------------------

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS PREMIER MONEY TRUST

38
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000

TOTAL ASSETS............................................................................. 216,237,660
------------

TOTAL LIABILITIES........................................................................ 295,445
------------

NET ASSETS............................................................................... $215,942,215
============

NET ASSET VALUE PER SHARE,
215,942,215 SHARES OUTSTANDING
(UNLIMITED SHARES AUTHORIZED OF $.01 PAR VALUE)............................................. $1.00
============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS PREMIER MONEY TRUST

39
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE PERIOD FEBRUARY 15, 2000* THROUGH JUNE 30, 2000

<TABLE>
<S> <C>
NET INVESTMENT INCOME:

INTEREST INCOME................................................................................. $3,403,089
----------

TOTAL EXPENSES............................................................................. 291,464

Less: amounts waived/reimbursed................................................................. (130,256)
----------

NET EXPENSES............................................................................... 161,208
----------

NET INVESTMENT INCOME........................................................................... 3,241,881
==========
</TABLE>

---------------------

* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS PREMIER MONEY TRUST

40
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

FOR THE PERIOD
FEBRUARY 15, 2000*
ENDED
JUNE 30, 2000
------------------------------------------------------------------------------------------------------------

<S> <C>
INCREASE (DECREASE) IN NET ASSETS:

NET INCREASE................................................................... 215,842,215

NET ASSETS:
Beginning of period................................................................. 100,000
----------------------

END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $48,156)...................... $ 215,942,215
======================
</TABLE>

---------------------

* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS

ACTIVE ASSETS PREMIER MONEY TRUST

41
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000

1. ORGANIZATION AND ACCOUNTING POLICIES

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS -- Portfolio securities are valued at amortized
cost, which approximates market value.

D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends
and distributions to shareholders as of the close of each business day.

ACTIVE ASSETS PREMIER MONEY TRUST

42
<PAGE>
ACTIVE ASSETS PREMIER MONEY TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000, CONTINUED

2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement with the Investment Manager, the
Fund pays the Investment Manager a management fee, accrued daily and payable
monthly, by applying the annual rate of 0.25% to the net assets of the Fund
determined as of the close of each business day.

3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales/maturities of portfolio securities
for the period ended June 30, 2000 aggregated $3,348,501,214 and $3,135,098,543,
respectively.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager is
the Fund's transfer agent.

4. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest, at $1.00 per share, were as
follows:

5. FEDERAL INCOME TAX STATUS

---------------------

* Commencement of operations.

ACTIVE ASSETS PREMIER MONEY TRUST

43
<PAGE>

ACTIVE ASSETS PREMIER MONEY TRUST
INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
ACTIVE ASSETS PREMIER MONEY TRUST

Deloitte & Touche LLP
NEW YORK, NEW YORK
AUGUST 7, 2000

2000 FEDERAL TAX NOTICE (UNAUDITED)

ACTIVE ASSETS PREMIER MONEY TRUST

44
<PAGE>

ACTIVE ASSETS PREMIER MONEY TRUST
CHANGE IN INDEPENDENT ACCOUNTANTS

On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.

On July 1, 2000 the Fund, with the approval of its Board of Trustees and its
Audit Committee, engaged Deloitte & Touche LLP as its new independent
accountants for the period ended
June 30, 2000.

ACTIVE ASSETS PREMIER MONEY TRUST